. The Calculus of Consumer and Producer Surplus -End of Appendix ProblemDemand for high-end purses in a town is given as P = 600 – 0.01Q', and supply is given as P = 100 + 0.04Q2, where price isin dollars, and quantity is in number of purses. In order to keep high-end purses super exclusive, a number of local social mediainfluencers lobby the government to impose a quota of 30 purses. In order to appear more in touch with the young social mediacrowd, the local government council agrees to implement the quota.a. Calculate the new consumer and producer surplus values after this intervention.CS = $PS = $b. The deadweight loss associated with the quota is$18,783.33.$19,447.O $16,216.67.O $21,969.33. c. Suppose the local government institutes a price regulation (floor) at $591 instead of the quota. Calculate the new consumerand producer surplus values after this intervention.CS = $PS = $d. What is the deadweight loss associated with the price floor?$16,216.67$18,783.33$19,447$21,969.33e. Consider this statement:Comparing your answers regarding the price floor in parts e and d to those regarding the quota in parts a and b, it is evident thatquantity and price regulations can be set such that the outcomes are the same for consumers and producers.The statement istrue.false.

Given information Demand function P=600-0.01Q2 Supply function P=100+0.04Q2

Demand for high-end purses in a town is given as P = 600 – 0.01Q², and supply is given as P = 100 + 0.04Q2, where price is in dollars, and quantity is in number of purses. In order to keep high-end purses super exclusive, a number of local social media influencers lobby the government to impose a quota of 30 purses. In order to appear more in touch with the young social media crowd, the local government council agrees to implement the quota. a. Calculate the new consumer and producer surplus values after this intervention.

Demand for high-end purses in a town is given as P = 600 – 0.01Q², and supply is given as P = 100 + 0.04Q2, where price is in dollars, and quantity is in number of purses. In order to keep high-end purses super exclusive, a number of local social media influencers lobby the government to impose a quota of 30 purses. In order to appear more in touch with the young social media crowd, the local government council agrees to implement the quota. a. Calculate the new consumer and producer surplus values after this intervention.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter7: Market Efficiency And Welfare

Section: Chapter Questions

Problem 5P

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