8. Consider a competitive market where the market demand and the market sup-ply are given, respectively, byQD = 500 – 2P and Q³ = 2P(a) Find the competitive equilibrium price and quantity.(b) Suppose the government wants to help the producers by imposing a pricefloor of pf = 150. Assuming that the producers correctly anticipate thedemand at price p,, find the consumer surplus, producer surplus, and thedeadweight loss.(c) Suppose, instead of using a price floor, the government decides to help theproducers by imposing a per unit tax t in the market and then giving allthe tax collected to the producers. What is the value of t that will make theproducers equally well off as in part (b)? What is the resulting deadweightloss?

8. Consider a competitive market where the market demand and the market sup- ply are given, respectively, by Q" = 500 - 2P and Q* = 2P (a) Find the competitive equilibrium price and quantity. (b) Suppose the government wants to help the producers by imposing a price floor of p, = 150. Assuming that the producers correctly anticipate the demand at price pr, find the consumer surplus, producer surplus, and the deadweight loss.

8. Consider a competitive market where the market demand and the market sup- ply are given, respectively, by Q" = 500 - 2P and Q* = 2P (a) Find the competitive equilibrium price and quantity. (b) Suppose the government wants to help the producers by imposing a price floor of p, = 150. Assuming that the producers correctly anticipate the demand at price pr, find the consumer surplus, producer surplus, and the deadweight loss.

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 6PA

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