Homework Answers
New equilibrium quantity 12 pairs of socks
New equilibrium price $6 per pair of socks
DWL = 0.5*(6-4)*(15-12) = $3
Government tax revenue = 12*(6-4) = $24
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The accompnying graph depicts the market for socks. Adjust the graph to demonstrate what happens if...
The demand and supply conditions of market for beer are given by the following equations: Qd...
The demand and supply conditions of market for beer are given by the following equations: Qd = 72 - P and Qs = -18 + P a) Find the initial equilibrium price and quantity. b) Calculate the consumer surplus and producer surplus for the equilibrium. c) Suppose that government impose a price floor at P=66 to control the consumption of beer. Is this policy effective? What are price and quantity consumed after this intervention of government? d) Going back to...
Consider a market with demand and supply functions of the form: D:Q^D=28-4P^D S:Q^s=-2+P^s a. Graph and...
Consider a market with demand and supply functions of the form: D:Q^D=28-4P^D S:Q^s=-2+P^s a. Graph and calculate the market equilibrium price and quantity. b. Graph and calculate the consumer surplus. c. Graph and calculate the producer surplus. d. Imagine the government imposes a $1 per unit tax on consumption of the good. Graph and calculate the deadweight loss of the tax.
2. Taxes and welfare Consider the market for commercial fans. The following graph shows the demand...
2. Taxes and welfare
Consider the market for commercial fans. The following graph
shows the demand and supply for commercial fans before the
government imposes any taxes.
First, use the black point (plus symbol) to indicate the
equilibrium price and quantity of commercial fans in the absence of
a tax. Then use the green point (triangle symbol) to shade the area
representing total consumer surplus (CS) at the equilibrium price.
Next, use the purple point (diamond symbol) to shade the...
2. Taxes and welfare the market for mountain bikes. The following graph shows the demand and...
2. Taxes and welfare the market for mountain bikes. The following graph shows the demand and supply for mountain bikes before the government imposes amy taxes First, use the black point (plus symbol) to indicate the equiibrium price and quantity of mountain bikes in the absence of a tax. Then use the green point (trlangle symbol) to shade the area representing total consumer surplus(CS) at the equilibnium price. Next, use the purple point (aiamond symbol) to shade the area representing...
The graph accompanying this question show the market for gadgets.
The graph accompanying this question show the market for gadgets. The government is considering intervening in this market. a) Calculate the producer surplus at the market equilibrium price and quantity. Show your work. b) If the government imposes a price ceiling at $24, is there a shortage, surplus, or neither? Explain. c) If instead the government imposes a price floor at $28, is there a shortage, surplus, or neither? Explain. d) If instead the government restricts market output to 14 units, calculate the deadweight...
Suppose market demand for bread is given by the equation QD = 12-P while the market...
Suppose market demand for bread is given by the equation QD = 12-P while the market supply equation is Qs = 2P. a. Calculate the equilibrium price and quantity, consumer surplus, and producer surplus in the market for tires. Graph your results. b. Suppose the government imposes a tax on tire producers of $3 per tire. i. What price will the buyer pay? What is the burden to consumers? What amount per unit will the seller receive? What is the...
Consider the market for mountain bikes. The following graph shows the demand and supply for mountain bikes before the government imposes any taxes.
Consider the market for mountain bikes. The following graph shows the demand and supply for mountain bikes before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of mountain bikes in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus...
Consider the market for designer purses. The following graph shows the demand and supply for designer purses before the government imposes any taxes.
2. Taxes and welfare Consider the market for designer purses. The following graph shows the demand and supply for designer purses before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer purses in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing...
Consider the market for designer purses. The following graph shows the demand and supply for designer purses before the government imposes any taxes.
2. Taxes and welfare Consider the market for designer purses. The following graph shows the demand and supply for designer purses before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer purses in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing...
Consider the market for commercial fans. The following graph shows the demand and supply for commercial fans before the government imposes any taxes.
Consider the market for commercial fans. The following graph shows the demand and supply for commercial fans before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fans in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus...
The demand and supply conditions of market for beer are given by the following equations: Qd = 72 - P and Qs = -18 + P a) Find the initial equilibrium price and quantity. b) Calculate the consumer surplus and producer surplus for the equilibrium. c) Suppose that government impose a price floor at P=66 to control the consumption of beer. Is this policy effective? What are price and quantity consumed after this intervention of government? d) Going back to...
2. Taxes and welfare
Consider the market for commercial fans. The following graph
shows the demand and supply for commercial fans before the
government imposes any taxes.
First, use the black point (plus symbol) to indicate the
equilibrium price and quantity of commercial fans in the absence of
a tax. Then use the green point (triangle symbol) to shade the area
representing total consumer surplus (CS) at the equilibrium price.
Next, use the purple point (diamond symbol) to shade the...
2. Taxes and welfare the market for mountain bikes. The following graph shows the demand and supply for mountain bikes before the government imposes amy taxes First, use the black point (plus symbol) to indicate the equiibrium price and quantity of mountain bikes in the absence of a tax. Then use the green point (trlangle symbol) to shade the area representing total consumer surplus(CS) at the equilibnium price. Next, use the purple point (aiamond symbol) to shade the area representing...
Suppose market demand for bread is given by the equation QD = 12-P while the market supply equation is Qs = 2P. a. Calculate the equilibrium price and quantity, consumer surplus, and producer surplus in the market for tires. Graph your results. b. Suppose the government imposes a tax on tire producers of $3 per tire. i. What price will the buyer pay? What is the burden to consumers? What amount per unit will the seller receive? What is the...
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