Question 1 (45%): In a perfectly competitive market, the demand curve is given as: Q=100-5P, the supply curve is given as Q=3P-12.
I. Compute the total social surplus of this market. (10%)
II. If the government impose a tax on the producers, and the tax rate is $2 per unit produced. What is the deadweight loss? (10%)
III. If the government impose a tax on the consumers, and the tax rate is $2 per unit purchased, graphically show the change in the market equilibrium and the deadweight loss. (15%)
IV. If the government provide a subsidy of $4 per unit to the producers, what is the deadweight loss? (10%)
Question 1 (45%): In a perfectly competitive market, the demand curve is given as: Q=100-5P, the supply curve is given...
Question 1: In a perfectly competitive market, the demand curve is given as: Q=100-5P, the supply curve is given as Q=3P-12. Compute the total social surplus of this market. If the government impose a tax on the producers, and the tax rate is $2 per unit produced. What is the deadweight loss? If the government impose a tax on the consumers, and the tax rate is $2 per unit purchased, graphically show the change in the market equilibrium and the...
In a small country, the demand curve is given as: Q=100-5P, supply curve: Q=3P-12, and the world price is $10. What is the social surplus under free trade? If the government impose a $2/unit tariff on the good, what is the deadweight loss? Show the change in equilibrium and deadweight loss on a graph.
In a small country, the demand curve is given as: Q=100-5P, supply curve: Q=3P-12, and the world price is $10. I. What is the social surplus under free trade? (5%) II. If the government impose a $2/unit tariff on the good, what is the deadweight loss? (10%) III. Show the change in equilibrium and deadweight loss on a graph. (10%)
Consider a perfectly competitive market where the market demand curve is given by Q = 76−8P and the market supply curve is given by Q=−8+4P. In situations (c), determine the following items (i-viii) (c) A market with subsidy S=9. i) The quantity sold in the market. ii) The price that consumers pay (before all taxes/subsidies). iii) The price that producers receive (after all taxes/subsidies). iv) The range of possible consumer surplus values. v) The range of possible producer surplus values....
Please answer question B 1. Consider a perfectly competitive market where the market demand curve is given by Q 72-4P and the market supply curve is given by Q-6+2P. In each of the following situations (a-e), determine the following items (i-vili) ) The quantity sold in the market. ii) The price that consumers pay (before all taxes/subsidies) ili) The price that producers receive (after all taxes/subsidies). iv) The range of possible consumer surplus values. v) The range of possible producer...
1. Consider a perfectly competitive market where the mar- ket demand curve is given by Q = 92-8P and the market supply curve is given by Q = -4 + 4P. In each of the following situations (a-e), determine the following items (i-viii) i) The quantity sold in the market. ii) The price that consumers pay (before all taxes/subsidies). iii) The price that producers receive (after all taxes/subsidies). iv) The range of possible consumer surplus values. v) The range of...
1. Consider a perfectly competitive market where the mar- ket demand curve is given by Q = 92-8P and the market supply curve is given by Q = -4 + 4P. In each of the following situations (a-e), determine the following items (i-viii) i) The quantity sold in the market. ii) The price that consumers pay (before all taxes/subsidies). iii) The price that producers receive (after all taxes/subsidies). iv) The range of possible consumer surplus values. v) The range of...
10.19. In a perfectly competitive market, the market demand curve is Qd = 10 -p, and the market supply curve is Q 1.5P a) Verify that the market equilibrium price and quantity in the absence of government intervention are Pd= P 4 and Qd Q 6. b) Consider two possible government interventions: (1)A price ceiling of $I per unit; (2) a subsidy of $5 per unit paid to producers. Verify that the equilibrium market price paid by consumers under the...
Q3) Suppose that the market demand and supply curve in a competitive market are Q"-15 - 2P and QS-P. For each of the following policies, calculate the price and quantity that will be traded and the value of the deadweight loss. a) An excise tax of S1 per unit, paid by producers. b) A subsidy of $2 per unit, paid to consumers. c) A price floor of S7. d) A price ceiling of S4. e) A production quota of 3...
Consider a perfectly competitive market where the market demand curve is given by Q = 72−4P and the market supply curve is given by Q = −6 + 2P. In each of the following situations (a-e), determine the following items v) The range of possible producer surplus values. vi) The government receipts. vii) The net benefit. viii) The range of deadweight loss. (a) A market with no intervention. (b) A market with tax T = 3. (c) A market with...