Suppose Rose, Amy, Clara, and Martha are consumers in the market for doctor's appointments. They are...
Suppose Rose, Amy, Clara, and Martha are consumers in the market
for doctor's appointments.
They are willing to pay 100, 90, 70, and 50 dollars for a doctor's
appointment respectively. The
available Doctors are Dr. Tennant, Dr. Smith, Dr. Capaldi and Dr.
Eccleston. The lowest price
they are willing to accept are 20, 25, 70, and 90 dollars
respectively for an appointment. Doctors can
only supply one appointment.
Hint: The supply curve is also the cost curve for the market. The
demand curve is also the willingness
to pay curve. Plot out the points for the supply and demand curves
and then solve for equilibrium
price and quantity.
(a) How many appointments are there in equilibrium?
(b) What is equilibrium price?
(c) What is Consumer Surplus (CS)?
(d) What is Producer Surplus (PS)?
(e) What is (Utilitarian) Social Welfare (W)?
Homework Answers
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Suppose Rose, Amy, Clara, and Martha are consumers in the market
for doctor's appointments.
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The following graph shows the market for doctor's office visits. In this market, the central government provides health insurance to all consumers. The government insurance plan stipulates a copayment of $40 per doctor's office visit. That is, consumers pay $40 for each doctor's appointment, and the government pays the remainder. Market for Doctor's Office Visits Demand Supply Area Calculator AGE PRICE Dollars per visit) QUANTITY OF VISITS (Million per month per doctor's office visit, and the equilibrium quantity would be...
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2. Suppose that there are 4 NBA teams in the market for a starting power forward....
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Consider the market for apartments. The market price of each apartment is $300,000, and each buyer demands no more than one apartment. Suppose that Larry is the only consumer in the apartment market. His willingness to pay for an apartment is $480,000. Based on Larry's willingness to pay, the following graph shows his demand curve for apartments. Shade the area representing Larry's consumer surplus using the green rectangle (triangle symbols). Larry's Demand Larry's Consumer Surplus Market Price PRICE (Thousands of...
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CENGAGE MINDTAP Homework (Ch 07) 2. Individual demand and consumer surplus Consider the market for antique...
CENGAGE MINDTAP Homework (Ch 07) 2. Individual demand and consumer surplus Consider the market for antique cars. The market price of each antique car is $200,000, and each buyer demands no more than one am Suppose that Kevin is the only consumer in the antique car market. His willingness to pay for an antique car is $320,000. Based on ke to pay, the following graph shows his demand curve for antique cars. Shade the area representing Kevin's consumer surplus using...
An increase in demand would enable a monopolist to raise its price while reducing its output....
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The following graph shows the market for doctor's office visits. In this market, the central government provides health insurance to all consumers. The government insurance plan stipulates a copayment of $40 per doctor's office visit. That is, consumers pay $40 for each doctor's appointment, and the government pays the remainder. Market for Doctor's Office Visits Demand Supply Area Calculator AGE PRICE Dollars per visit) QUANTITY OF VISITS (Million per month per doctor's office visit, and the equilibrium quantity would be...
2. Individual demand and consumer surplus Consider the market for yachts. The market price of each yacht is $140,000, and each buyer demands no more than one yacht. Suppose that Bob is the only consumer in the yacht market. His willingness to pay for a yacht is $245,000. Based on Bob's willingness to pay, the following graph shows his demand curve for yachts. Shade the area representing Bob's consumer surplus using the green rectangle (triangle symbols). Bob's Demand Bob's Consumer...
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Consider the market for apartments. The market price of each apartment is $300,000, and each buyer demands no more than one apartment. Suppose that Larry is the only consumer in the apartment market. His willingness to pay for an apartment is $480,000. Based on Larry's willingness to pay, the following graph shows his demand curve for apartments. Shade the area representing Larry's consumer surplus using the green rectangle (triangle symbols). Larry's Demand Larry's Consumer Surplus Market Price PRICE (Thousands of...
Individual demand and consumer surplus
Consider the market for apartments. The market price of each
apartment is $180,000, and each buyer demands no more than one
apartment.
Suppose that Van is the only consumer in the apartment market. His
willingness to pay for an apartment is $315,000. Based on Van's
willingness to pay, the following graph shows his demand curve for
apartments.
Now, suppose another buyer, Amy, enters the market for
apartments, and her willingness to pay is $225,000.
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