2. Consider a perfectly competitive market for anchovies. The demand curve is given byQD = 72 – 2PD and the supply curve is given by Qs = 3Ps – 3.a) Find the equilibrium price and quantity traded in this market. What does 'equilibrium'mean here? How would a price floor of $10 per unit have changed the quantity tradedand why?b) Sketch the supply and demand curves (on the usual axes) and mark the equilibriumpoint. Calculate the amount of consumer and producer surplus in equilibrium (pleaseremember to include the appropriate units of measurement for your answer).

Answered: Image /qna-images/answer/5219e631-557a-47b6-be47-c0b83ef9ff26.jpg

Answered: 2. Consider a perfectly competitive…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.6P

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Consider in perfectly competitive market the following demand and supply equations for sugar:Qd =1000-1000p where Q d is quantity demanded and Qs is quantity supplied. Qs=800+ 1000p Where P is the price of sugar per pound and Q is thousands of pounds of sugar. (a) Suppose that the government wishes to subsidize sugar production by placing a floor on sugar prices of $0.20 per pound. What would be the relationship between the quantity supplied and quantity demand for sugar?(b) Identify market problem specifically at prices 0.2 per pound and what will be scientific recommendation you suggest to solve the identified market problem?
Assume the market for oil is perfectly competitive, with the following market demand and supply curves (price in S and quantities in millions of barrels per day): Qd=95-P Qs= 15 + 3P Find the equilibrium price and quantity exchanged in this market.
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Market demand is given as Qd = 80 – 2P. Market supply is given as Qs = 2P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market? A. price will be $20 and quantity will be 10 B. price will be $20 and quantity will be 40 C. price will be $40 and quantity will be 20 D. price will be $10 and quantity will be 20
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Consider the market for electronic components ("chips") and assume that there is complete competition.1a) Graph the short-run market equilibrium in a supply-demand diagram. 1b) Due to entry restrictions, there are long waiting times and thus supply passports. Show what impact these supply bottlenecks have on the market for electric cars. For this purpose, graphically represent the situation with and without supply bottlenecks in a supply-demand diagram. Label the old and new market equilibrium as well as the new and old consumer and producer surplus. Be sure to include the necessary labels in your diagram. 1c) Since the effects on the market for electric cars related to the supply bottleneck are not desirable from a macroeconomic perspective, the government is considering intervening with economic policy measures. In your diagram from 1b), show why the effects addressed are not desirable from a macroeconomic perspective. Also explain this briefly in the text or annotated keywords.1d)…
In a competitive market, the current equilibrium price is $100 per unit. A firm that produces Q units of output in this market has a short-run Total Cost (TC) given by ?? = 1000 + 20? + 2?2. What is the marginal cost for this firm? How many units should the firm produce?
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In a purely competitive market at its long-run equilibrium, which of the following is not true? a The marginal benefit of the last unit of the product equals the marginal cost of producing that unit. b The maximum willingness of buyers to pay for the last unit of the product equals the minimum acceptable price for the seller of that unit. c Price equals marginal cost, and they are equal to the lowest attainable average cost of production. d The combined amount of consumer and producer surpluses is at its minimum possible.
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