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
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- in a market with a binding ceiling, an increase in the ceiling will?Suppose that the market for e-cigarettes can be represented by the following equations: Demand: P = 60 - 2QDSupply: P = 21 + 4QSwhere P is the price per device, and Q represents quantity of e-cigarettes, represented inmillions of devices consumed d) Calculate the new producer surplus and consumer surplus?e) How much revenue does the government raise from the tax?f) How does the sum of consumer surplus, producer surplus, and revenue after the tax(your answers to part d) and part e)) compare to the sum of producer and consumersurplus found before the tax? What does the differencebetween the two represent?1. Given the following information Qd= 240 – 5p Qs= P Where Qd is the quantity demanded, Qs is the quantity supplied and P is the price.What is the consumer surplus before the tax? 2. Given the following information Qd= 240 – 5p Qs= P Where Qd is the quantity demanded, Qs is the quantity supplied and P is the price. What is the producer surplus before the tax? 3. Given the following information Qd= 240 – 5p Qs= P Where Qd is the quantity demanded, Qs is the quantity supplied and P is the price.What is the equilibrium price before the tax? 4. Given the following information Qd= 240 – 5p Qs= P Where Qd is the quantity demanded, Qs is the quantity supplied and P is the price. What is the equilibrium quantity before the tax? 5. Given the following information Qd = 240 – 5p Qs= P Where Qd is the quantity demanded, Qs is the quantity supplied and P is the price.Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. What would be the demand and…
- 2)A binding price ceiling creates a floor or creates a ceiling? Explain and graph***This is a three-part question - EACH PART requires a solution/explanation*** 1. Assume that the demand for cigarettes is Qd=1600-30P and the supply of cigarettes is Qs=1400+70P. Now, suppose the government levies a $2 tax for each unit of cigarettes sold. a. On a graph, identify the tax revenue generated by this tax. Label each area on the graph with a letter. b. Show in a table the consumer surplus and the producer surplus before and after the tax. c. Indicate the deadweight loss associated with this tax.Solve economic Which one of the two policies, a tax on pork meat consumption, or a tax on pork meat production, is more efficient? Why?
- Consider the market for ice cream cones. Suppose that supply in this market is given by P^S = Q^S and demand is given by P^D = 30 - 4Q^D. Answer the following question. Suppose that the government is considering imposing a $4.00 price control as either a price ceiling or a price floor. Would this be a binding price control as a price floor or as a price ceiling? Will this cause a shortage or a surplus? Compute the size of the shortage or surplus that would result.Refer to the figure below for parts a and b. Instructions: Round your answers to two decimal places. See Graph a. Illustrate the consumer surplus generated if the market is in equilibrium. Consumer surplus is $ ______thousand. b. Illustrate the producer surplus generated if the market is in equilibrium. Producer surplus is $_____ thousand. c. What is the total economic surplus? Total economic surplus is $ _____thousand. Suppose a tax is levied in the market for soda. Consider a $0.50 excise tax on producers for each soda sold. The graph illustrates the demand and supply curves for soda both before and after the tax is levied. Use the graph below to answer the remaining parts of this question. SEE GRAPH d. What is the consumer surplus generated after the imposition of the tax? Shade in this area on the graph. Instructions: Use the tool provided “CStax” to illustrate this area on the graph. Consumer surplus after the imposition of the tax is $ _____ thousand.…Suppose that the government wants to tax wealthy people. They notice that only wealthypeople buy yachts. So the government decides to tax yachts. Is this an effective way to tax thewealthy? Explain your answer
- Q^d= 9.5 - 2p Q^s= 0.6p Price Floor. Suppose that the government imposes a price floor equal to P F = 1.60. (a) Draw a diagram showing your market for donuts and indicate the price floor on this diagram. Is this price floor binding in your market for donuts? Carefully explain how you came to your answer. 1 (b) If this price floor is binding, how many donuts will be sold in this market following its imposition, and at what price? (c) If this is a binding price floor, does it lead to a shortage or a surplus of donuts? If so, calculate the amount of this shortage or surplus.Your grandmother likes old-fashioned yard salesand doesn’t understand why everyone is so excitedabout eBay. Explain to her why the creation of amarket that enables people who don’t live in thesame town to buy and sell used goods increasestotal surplus over the yard-sale market.Draw diagram of the effect of a binding price floor. Clearly label your axis, consumer and producer surplus, dead weight loss and equilibrium with and without the price floor.
