Consider a market where supply and demand are given by QXS = −14 + PX and QXd = 91 − 2PX. Suppose the government imposes a price floor of $42, and agrees to purchase and discard any and all units consumers do not buy at the floor price of $42 per unit. Instructions: Enter your responses rounded to the nearest penny (two decimal places). a. Determine the cost to the government of buying firms’ unsold units. b. Compute the lost social welfare (deadweight loss) that stems from the $42 price floor.

Consider a market where supply and demand are given by QXS = −14 + PX and QXd = 91 − 2PX. Suppose the government imposes a price floor of $42, and agrees to purchase and discard any and all units consumers do not buy at the floor price of $42 per unit. Instructions: Enter your responses rounded to the nearest penny (two decimal places). a. Determine the cost to the government of buying firms’ unsold units. b. Compute the lost social welfare (deadweight loss) that stems from the $42 price floor.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter4: Markets In Action

Section: Chapter Questions

Problem 15SQ

See similar textbooks

Similar questions

The market for a particular consumer good has a demand function given by: q = 24 - p and supply given by p = q + q^2, where q is the quantity and p is the price. Question: If the government decided not to set the price, but instead imposed a tax on production of $1 per unit, effectively increasing the cost to supply by $1 dollar per unit for every level of quantity supplied, what would the new equilibrium quantity be?
Suppose demand and supply are given by Qd = 60 − P and Qs = 1.0P − 20.a. What are the equilibrium quantity and price in this market?Equilibrium quantity: Equilibrium price: $ b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $50 is imposed in this market.Quantity demanded: Quantity supplied: Surplus: c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $32 is imposed in the market. Also, determine the full economic price paid by consumers.Quantity demanded: Quantity supplied: Shortage: Full economic price:
Suppose demand and supply are given by Qd = 60 - P and Qs = P - 20.a. What are the equilibrium quantity and price in this market?Equilibrium quantity: Equilibrium price: $b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $50 is imposed in this market.Quantity demanded: Quantity supplied: Surplus: c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $32 is imposed in the market. Also, determine the full economic price paid by consumers.Quantity demanded: Quantity supplied: Shortage: Full economic price: $
Market Demand: P_D=25 -2Q_D Market Supply: P_S=5 + 2Q_S Solve for the equilibrium price given the following demand and supply functions. If a government subsidy induces producers consider increasing supply by 2 more units. How will this affect the price and quantity of product consumed? (Please draw the original and new curves on the same graph)
Respond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote. Suppose demand and supply are given by Qd = 50 - P and Qs = 1.0P - 20. a. What are the equilibrium quantity and price in this market? Equilibrium quantity: 15 Equilibrium price: $ b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $42 is imposed in this market. Quantity demanded: Quantity supplied: Surplus: c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $28 is imposed in the market. Also, determine the full economic price paid by consumers. Quantity demanded: Quantity supplied: Shortage: Full economic price: $
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. Removing the excise tax on product X will
The demand for petroleum is given by QD=85 − 0.4P where Q D is the quantity demanded in thousands of barrels per day and P is the price per barrel in dollars. The supply of petroleum is given by QS=55+0.6P. Calculate the equilibrium price and quantity in this market. 2. In the context of the problem in part (a), calculate the demand and supply for petroleum if the market price is $15 per barrel. What problem exists in the economy?
1. Demand for grain is given by function Qd=9-4P and supply - by function Qs=2P. The government also entered the market and bought 6 units of the grain. Which equilibrium price will be established in this market and how much grain will be sold? 3. Price elasticity of demand, last sale, last price, and initial price accordingly are -1,5; 20; 10; 40. Find the initial sale KINDLY ANSWER SECTION 3 URGENTLY.
Suppose demand and supply are given by Qd = 40 − P and Qs = 1.0P − 10. c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $18 is imposed in the market. Also, determine the full economic price paid by consumers.Quantity demanded: Quantity supplied: Shortage: Full economic price: $
Question 16 Refer the to graph below to answer Questions 16-18 In the graph above, if the minimum price is set at P1, what area(s) represent the producer surplus after the implementation of this policy? Question 16 options: a) Areas B+C+E+F b) Areas B+E c) Areas E+F d) Area E e) Area B Question 17 In the graph above, if the minimum price is set at P1, what will limit the quantity of the good that is sold? Question 17 options: a) Demand b) Supply c) A government quota d) Consumer surplus e) Producer surplus Question 18 In the graph above, if the minimum price is set at P1, what area(s)…
In a certain market, the demand is given by Qd = 60 - 6P and the supply by Qs = 4P. Assume a price ceiling was imposed at $3. The full economic price is?
In a competitive market, the following supply and demand equations are given: Supply P = 5 + 0.36Q Demand P = 100 - 0.04Q, where P represents price per unit in dollars, and Q represents rate of sales in units per Year. 1. I. Determine the equilibrium price and sales rate. Determine the deadweight loss that would result if the government were to impose a price ceiling of £40 per unit.