500 Price Ceiling 400 300 100 Quantity Use the figure to answer the questions below: • Calculate the consumer surplus, producer surplus and total surplus before price ceiling (rent control). Calculate the consumer surplus, producer surplus and deadweight loss after price
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- demand equations QD = 3550 - 266P supply equations QS = 1800 + 240P Calculate initial consumer surplus and producer surplus. Now assume that government intervenes in the market through ceiling price (assume a value) and or floor price (assume a value). Find the change in welfare (DWL) loss and the new consumer surplus and producer surplus. Do you support these types of interventions?Prepare a hypothetical linear demand and supply schedule (you can use the sameschedule as in question 2) , estimate the demand and supply equations, and the calculateinitial consumer surplus and producer surplus. Now assume that government intervenesin the market through ceiling price (assume a value) and or floor price (assume a value).Find the change in welfare (DWL) loss and the new consumer surplus and producersurplus. Do you support these types of interventions?A) Given the following information: QD= 240-5P QS= P Where QD is the quantity demanded, QS is the quantity supplied and P is the price. Calculate surplus before tax _________________. B) Given the following information: QD= 240-5P QS= P Where QD is the quantity demanded, QS is the quantity supplied and P is the price. Calculate producer surplus before tax _____________. C) Given the following information: QD- 240-5P QS= P Where QD is the quantity demanded, QS is the quantity supplied and P is the price. Suppose the government decided to impose tax of $12 per unit on sellers in this market. Determine: Demand and Supply equation after tax Supply Equation? Choose one of the following 240-5P Q= 300-5P Q= P-12 Q= P+12 Q= P Q= 180-SP Q= 228-5P Q= 252-P Demand equation ? Choose one of the following 240-5P Q= 300-5P Q= P-12 Q= P+12 Q= P Q= 180-SP Q= 228-5P Q= 252-P
- Identify a article that illustrate a market failure "air or water pollution" in Trinidad and Tobago. (i) Identify the type of market failure being discussed in the article and discuss why market failure occurs in this scenario. (ii) Suggest a relevant government policy that would yield the efficient outcome and carefully explain the process through which the implementation of the government policy will lead to the optimal outcome. . (iii) Carefully explain how the imposition of the chosen government policy impact consumer surplus, producer surplus and total surplus in this scenario.An effective price ceiling causes the quantity exchanged to _______ and the price of the product to ______ compared to the market equilibrium. Question 2Answer a. decrease, decrease b. increase, decrease c. increase, increase d. decrease, increaseA10 An effective price ceiling causes a loss of: a) consumer surplus for certain and possibly producer surplus as well. b) producer surplus for certain and possibly consumer surplus as well. c) consumer surplus only. d) neither producer nor consumer surplus.
- Which of the variables (consumer surplus, producer surplus, and deadweight loss) have decreased due to the price floor of $9.00 set by the government? Deadweight loss Producer surplus Market equilibrium price Consumer surplusThe following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) 64.00 48.00 32.00 Demand A B D F 20 C E 40, 48 40 Supply QUANTITY (Blinkies) ?This question doesn’t involve any numerical calculation. The USDA considers investing in R&D to make production less costly. The supply function of Cabbage is perfectly elastic. a. Draw the supply and demand for cabbage in the market before and after the investment in R&D.b. Mark with letters (A, B, C, D, …) the relevant intersections of the supply and demand curves and indicate what is the consumer surplus, what is the producer surplus, and what is the social surplus.
- Please assist with the following questions 1. Calculate the (i) consumer surplus BREFORE THE TAX (ii) producers surplus BEFORE THE TAX 2. For the market of cigarettes WITH THE TAX please indicate (i) the tax (ii) price paid by consumers (iii) price received by producers (iv) Quantitiy of cigarettes sold thank youQuestion 4 Given: QD = 160 -5P QS = -11 + 4P In addition, the government imposed a $3.00 tax on the buyer. Calculate the following: (a) The equilibrium price and equilibrium quantity. (b) Consumer and producer surplus before the tax. (c) Consumer surplus after the tax. (d) Producer surplus after the tax. (e) Deadweight loss. (f) Government revenueIf there is a $3 tax, what is the equilibrium price buyers pay, the price sellers receive, and the quantity? Additionally, what is the CS, PS, tax revenue, TS, and deadweight loss?