Due to good weather, there is an increase in the demand for the good. The new demand equation is Qd = 190 – 2P. The government s trying to decide between two options: Maintain the number of quotas and let the market adjust, or Maintain the price support and increase the number of quotas. uppose that the government decides to maintain the number of quotas and let the market adjust. c) Calculate the ) price observed in the market, HINT: Sketch the supply and demand equations.
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In addition to the image calculate the following:
I) The
ii) The producer surplus
iii) the
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- Due to good weather, there is an increase in the demand for the good. the new demand equation is qd=190-2p. The government is trying to decide between two options: * Maintain the number of quotas and let the market adjust, or * Maintain the price support and increase the number of quotas suppose that the government decides to maintain the number of quotas and let the market adjust. c) calculate the i) price observed in the market ii). consumer surplus iii). producer surplusDue to good weather, there is an increase in the demand for the good. the new demand equation is Qd =190-2p. The government is trying to decide between two options. Maintain the number of quotas and let the market adjust or maintain the price support and increase the number of quotas and let the market adjust. Calculate the price observed in the market. Hint: sketch the supply and demand equation. (i) the consumer surplus, (ii) producer surplus (iii) deadweight lossDue to good weather, there is an increase in the demand for the good. the new demand equation is Qd = 190 - 2P. The government is trying to decide between two options: Maintain the number of quotas and let the market adjust, or Maintain the price support and increase the number of quotas. Suppose that the government decides to maintain the number of quotas and let the market adjust. (c) Calculate the (i) price observed in the market (ii) the consumer surplus (iii) the producer surplus (iv) deadweight loss
- Due to good weather, there is an increase in the demand for the food. The new demand equation is Qd=190-2p. The government is trying to decide between two options: -maintain quota - maintain the price suppose that the government decides to maintain the number quotas and let the market adjust. calculate: i. Price observed in market ii. Consumer surplus iii. The producer surplus deadweight loss Suppose now that the government decides to increase the number of quotas available to 72 units, but it keeps the price at the current level of $72. Calculate i. The consumer surplus ii. The producer surplus iii. Dead weight loss and which of the two options would be preferred by the producers? which of the two options would be preferred by society as a whole?Due to Covid-19, it is expected that the US economy will contract quickly going into a recession for a (hopefully) short period of time, and as a result of that, incomes will fall. If so, what happens in the markets for inferior goods? Answer choices: Prices and quantities both rise. Prices and quantities both fall. Prices rise, quantities fall. Prices fall, quantities rise. Prices rise and quantities remain unchanged. Prices remain unchanged and quantities fall.S1: Multiple equilibria is a condition in which more than one equilibrium exists. S2: These equilibria sometimes may be ranked, in the sense that one is preferred over another, but the unaided market will not move the economy to the preferred outcome. A. True, True B. True, False C. False, True D. False, False
- In order to encourage energy conservation, many public utility companiescharge consumers a higher rate on units of electricity consumed in excess of some threshold amount. In contrast, a common practice by other firms is to offer “quantity discounts” to consumers who purchase large quantities of a good. Suppose income is $100, PX = $2 if the consumer buys less than 40 units of X, and PY = $5.A. For the energy case, assume PX = $3 if the consumer buys more than 40 units of XB. For the “quantity discounts” case, assume PX = $1 after 40 units of X were consumed Draw the budget constraints in each of the cases above. What are the implications of the opportunity sets in terms of consumer behavior to consume each of the products?If in the study results obtained a demand and supply model for ties and suits: Demand for tie: Qdt = 410 – 5Pt – 2Ps Supply of tie: Qst = – 60 + 3Pt Demand for suit: Qds= 295 – Pt – 3Ps Supply of suit: Qss=–120 + 2Ps Based on the estimation results, then: a. Determine the general equilibrium price of a tie and suit b. What is the type of relationship between a tie and a suit? Explain your argumentDue to good weather there is an increase in the demand for the good. The new demand equation is Qd= 190- 2p. The government is trying to decide between two options: • Maintain the number of quotas and let the market adjust, or • Maintain the price support and increase the number of quotas. Suppose that the government decides to maintain the number of quotas and let the market adjust. c. Calculate the i) price observed in the market ii) consumer surplus iii) producer surplus iv) deadweight loss Hint: Sketch the supply and demand equations
- Due to good weather, there is an increase in the demand for the goods. the new demand is Qd=190-2p. the government is trying to decide between two options. 1. maintain the number of quotas and let the market adjust or main the price support and increase the number of quotas. suppose the government decides to maintain the number of quotas and let the market adjust. calculate the: 1. price observed in the market 2. the consumer surplus 3. deadweight loss suppose now the government decides to increase the number of quotas available to 72 units, but it keeps getting the price support at the current level of $72? calculate: 1. the consumer surplus 2. producer surplus 3. deadweight loss ThanksIf we are valuing the impact of a price rise (that will give a decrease in consumer surplus) we should use ............ a) equivalent variation b) compensating variation c) contingent variationDemand for Orange Juice is given as Qd = 200 – 300 P + 120 I + 65 T – 250 Pc + 400 Ps Suppose Income is I = $10, Expectations T = 60, Price of Pc = $15 and Ps = $10. Find the Demand Equation. Using the demand function from part a., Calculate Elasticity of Demand for price range of $10 and $11. What will be the ‘Price Elasticity of Demand’ at P = $10? Interpret the Elasticity of Demand calculated in (C) above.