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- Considermarketforagoodcharacterizedbythefollowinginverse demand and supply functions: PX = 10 − 2QX and PX = 2 + 2QX.a. Compute the surplus received by consumers and producers.b. Now suppose all manufacturers of this good are to pay a lump tax of $0.10that will be used by the government regulators to defray some of the environmental cost imposed by this good’s production. What will be the new surplus received by consumers and producers?c. Based on your results in part ‘b’ above, how will you evaluate the impact of this tax policy on the society? ExplainSam is a personal trainer working for private clients. He just moved from California to a city on the East Coast and he needs to create his newclient base. A colleague told him that on the East Coast personal trainers face an inverse demand P = 300 – 20Q, that is when working with Qclients, a personal trainer can find one more client willing to pay P = 300 – 20Q for a weekly training session. Sam’s opportunity cost of a twohour training session is MC = 10Q. We make the heroic assumption that clients are infinitely divisible so that we can use calculus to solveSam’s profit maximizing problems.At first, Sam doesn’t read East Coasters that well and he can’t tell who is willing to pay more money for training sessions. Hence, he chargesall clients the same price.a) In part naively in part to get to know more people, Sam decides to sign up any customer willing to pay a price at least as high as his marginalcost of time. That is, Sam behaves like a price-taker. How many clients does he…When a market is in equilibrium, the buyers arethose with the _________ willingness to pay and thesellers are those with the _________ costs.a. highest; highestb. highest; lowestc. lowest; highestd. lowest; lowest
- Demand Function:Qd=4,000−200pSupply function:Qs=100p−500 A president is presenting instituitiong a tax that will reduce quanityt to 500 units, the presdient says it will increase total surplus becasue of the revenue a) If the presdient wants to reduce the quantity sold in this market to be equal to 500 units, then what size tax does the presdient need to put? b) What is the Buyer’s and Seller’s Incidence of this tax? c) What is the Consumer Surplus, Producer Surplus, and Revenue Raised?Alvin’s demand for bottled water is given by QdA = 8−0.5P. Betty’s demand function is QdB = 6 − P. Calculate Alvin and Betty’s marginal and total willingness to pay for four bottles of water and illustrate graphically. Compute the aggregate demand for bottled water, assuming Alvin and Betty are the only consumers. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds of companies offering tax preparation in a given market. The current market equilibrium price is $170. Joe Audit’s Tax Service has a daily, short-run total cost given by TC = 1000 + 4Q2 + 10Q with marginal cost MC = 8Q + 10. How much will he earn in profit, found by total revenue minus total cost, each day?
- hi how about the answer for part d and e? d) Lump sum tax (LS): Instead of a tax per unit, the government imposes a lump tax of$400 on Rugby AU. Find the new optimal price ? % &" and quantity ?%&" that Rugby AUchooses and compute its profit ?%&" in this case. e) Suppose that the government is looking to tax Rugby AU to raise revenue for buildingnew sport facilities for kids and hires you to advise which one of the taxes above – a tax per unit or a lump sum – to implement. Which one of the two taxes would yourecommend? Justify and explain why.Q)Assume standard downward sloping demand for subways rides. At a per-trip price of $4,you take 30 trips per month. Alternatively, you can purchase a monthly pass whose price is $120for unlimited rides. If you purchased the monthly pass, you _____ consumer surplus as if youpaid $4 per ride and you would take _____ trips.A. get the same; the same number of.B. get the same; more.C. get more; more.D. get more; the same number of.E. might get more or less; the same number of.The demand curve for product X is given by QXd = 480 - 2PX. Instruction: Enter all values as integers, or if needed, as a decimal.a. Find the inverse demand curve. Instructions: Enter your responses to the nearest penny (two decimal places).b. How much consumer surplus do consumers receive when Px = $50?c. How much consumer surplus do consumers receive when Px = $30?d. In general, what happens to the level of consumer surplus as the price of a good falls?(choose one) The level of consumer surplus; increases, doesn't change, or decreases as the price of a good falls?
- The demand curve for product X is given by QXd = 420 − 4PX.a. Find the inverse demand curve. Instruction: Enter all values as integers, or if needed, as a decimal. PX = − QXdInstructions: Enter your responses to the nearest penny (two decimal places).b. How much consumer surplus do consumers receive when Px = $50?$ c. How much consumer surplus do consumers receive when Px = $25?$ d. In general, what happens to the level of consumer surplus as the price of a good falls?The level of consumer surplus as the price of a good falls.The demand for a good is given by QD = 800 – 0.5P. What is consumer surplus at P = $400? Group of answer choices $187,500. $781,000. $644,405. $720,000. $360,000.A friend of yours is considering two cell phone service providers. Provider A charges 120 per month for the service regardless of the number of phone calls made. Provider B does not have a fixed service fee but instead charges 1 per minute for calls. Your friend's monthly demand for minutes of calling is given by the equation QD = 150 50P, where P is the price of a minute. a. With each provider, what is the cost to your friend of an extra minute on the phone? b. In light of your answer to (a), how many minutes with each provider would your friend talk on the phone? c. How much would she end up paying each provider every month? d. How much consumer surplus would she obtain with each provider? (Hint: Graph the demand curve and recall the formula for the area of a triangle.) e. Which provider would you recommend that your friend choose? Why?