In the diagram to the right, illustrating a binding price floor at P, the amount ofand the1.consumer surplus transferred to producers is represented by areaSodeadweight loss is equal to areasA1P2 BEDoQuantity (per time period)Price

As the binding price is at P1, the amount of consumer surplus transferred to producers is…

Answered: and the onsumer surplus transferred to…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter7: Market Efficiency And Welfare

Section: Chapter Questions

Problem 5P

See similar textbooks

Similar questions

Suppose that the demand for a concert is represented by the following equation, where P is the price of concert tickets and QD is the quantity of tickets demanded:QD = 2200 - 24PThe supply of tickets is represented by the equation where P is the price of the tickets and QS is the quantity of tickets supplied:QS = -500 +79PGive all answers to two decimals. 1. Find the equilibrium price and quantity of tickets sold. 2. Calculate the consumer surplus and producer surplus at the equilibrium price and quantity. Use the formula for the area of a triangle, (½ × base × height), to calculate each value.
•A market has the market supply equation as P = ½Q andthe demand equation as P = 6 ½Q, where P is price indollars and Q is the quantity.•••(a) Solve for the equilibrium price, the equilibrium quantity,the consumer surplus and the producer surplus in themarket. Support your answers with a suitable marketdiagram.•••(b) If there is a price ceiling of $2, compute the consumersurplus, producer surplus and the deadweight loss in themarket. Support your answers with a suitable marketdiagram.
2. Consider a competitive market characterized by the following marketdemand and supply curves.Qd=10000-10P Qs=40P-2000If the government enacts a binding price floor at 500, calculate the resultingconsumer surplus, producer surplus, and deadweight loss.Hint: a diagram might help. Show your work.
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? Explain
Draw a graph that shows the agricultural market in equilibrium with a binding price floor. Label equilibrium price, equilibrium quantity, and changes in consumer surplus, producer surplus, and deadweight loss on the graph. Is this prioce floor guaranteed to make producers better off?
With relevant examples distinguish between: (i) Producer's and Consumer's surplus, (ii) Maximum and Minimum Price
A $1 per unit tax levied on consumers of a good isequivalent toa. a $1 per unit tax levied on producers of the good.b. a $1 per unit subsidy paid to producers of the good.c. a price floor that raises the good’s price by $1 perunit.d. a price ceiling that raises the good’s price by $1per unit.
Find the consumer surplus and producer surplus for the demand and supply functions asfollows respectively. pz (x) = -0.2x +8, pi (x) = 0.1x + 2. Please interpret the meaning of both by a sketch.
Assume that the monthly demand for Gala apple in the US is given by q=1200-300p and quantity is in million pounds. The monthly supply of Gala is q= -200+400p for p>$0.5. Now assume that the government has imposed a quantity tax equal to $0.14 on each pound of apple. Assume that the retail stores are legally obliged to collect this tax. What is the new producer and consumer surplus?
Consumer surplus is the difference between what a consumer is willing to pay and what they actually pay for a good or service. ... The producer surplus is the difference between the actual price of a good or service–the market price–and the lowest price a producer would be willing to accept for a good. Given the following information, calculate both the producer and consumer surplus a. P- 140 = - .5q b. MC = 10 + 4q show all working and draw graph
Isabelle values her time at $60 an hour. She spends2 hours giving Jayla a massage. Jayla was willingto pay as much as $300 for the massage, but theynegotiated a price of $200. In this transaction,a. consumer surplus is $20 larger than producersurplus.b. consumer surplus is $40 larger than producersurplus.c. producer surplus is $20 larger than consumersurplus.d. producer surplus is $40 larger than consumersurplus.
A. The demand curve for a product is D = -2p + 800 , where the demand is units , and p is the price in $ . When the price is $ 100 , calculate the consumer surplus . Also , show a graph that indicates the consumer surplus . B. The supply curve for a product is S = 5p - 400 , where the supply is 5 units , and p is the price in $ . When the price is $ 200 , calculate the producer surplus . Also , show a graph that indicates the producer surplus

SEE MORE QUESTIONS

Recommended textbooks for you

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Microeconomics: Principles & Policy

Economics

ISBN:

9781337794992

Author:

William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:

Cengage Learning

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Microeconomics: Principles & Policy

Economics

ISBN:

9781337794992

Author:

William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:

Cengage Learning

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Microeconomics (MindTap Course List)

Economics

ISBN:

9781305971493

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Macroeconomics (MindTap Course List)

Economics

ISBN:

9781285165912

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Essentials of Economics (MindTap Course List)

Economics

ISBN:

9781337091992

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS

and the onsumer surplus transferred to producers is represented by area So eadweight loss is equal to areas A B D Do Quantity (per time period) ..... Price