Please refer to the image below and answer the question 11. The answer is already provided. In each of the following markets find the market equilibrium. Then consider theeffect of a price floor (or ceiling) imposed by the government. Find the quantitydemanded Qd, quantity supplied Qs and the corresponding surplus (or deficit) in themarket.Demand:Supply:1 Qd Price floor = 71 QsPS = 82 Qd Price floor =2 QsP = 10Surplus =2CS' =PS' =1Pe= 6P =2 +Qe= 44.5CS811Demand:Supply:Surplus =1CS' =PS' =2P = 10 -Pe= 6P =2 +Qe= 22.3CS =' 4PS = 45.3Demand:Supply:3P =6 -0.5 Qd Price ceiling = 3Pe= 4Deficit = 4P =2 + 0.5 QsCS' =PS' =Qe= 4CS4PS = 41Demand:Supply:P = 18 -2 Qd Price floor = 10Pe= 6Surplus =10CS' =P =3 + 0.5 QsQe= 616CS36PS =: 9PS' =24Demand:0.5 Qd Price ceiling =2 Qs5P = 14 -7Pe= 12Deficit = 13Supply:CS' =PS' =P =4 +Qe= 49.9CS4PS =: 162.3Demand:Supply:P = 24 -P =3 Qd Price floor = 121 QsSurplus =:4CS' =PS' =6Pe= 94 +Qe= 524CS = 38P = 30 - 0.5 Qd Price ceiling = 14PS = 1324Demand:Supply:7Pe= 26Deficit = 28P =2 +3 QsQe= 8CS' =60CS16PS = 96PS' =24Demand:2 Qd Price floor = 243 QsP = 28 -Pe= 18Surplus =:5CS' =PS' =8Supply:P =25P = 303 +Qe= 54PS = 383 Qd Price floor = 21|2 QsPS = 254 Qd Price floor = 121 QsPS = 83 Qd Price ceiling = 114 QsCS36Demand:Supply:Surplus =:5CS' =9Pe= 15P =5 +Qe= 514CS = 38P = 24 -PS' =39Demand:Supply:Pe= 8Surplus =5CS' =10P =4 +Qe= 41832PS' =Deficit = 15CS' =CS2011Demand:P = 60 -Pe= 36Supply:P =4 +Qe= 881CS96PS =: ##PS' =6.1Demand:P = 20 -P =CS ='32124 Qd Price floor =8Surplus =9CS' =Pe= 4Supply:2 + 0.5 QsQe= 418PS =: 4PS' =1613 Demand:Supply:P = 10 -4 Qd Price ceiling = 44 QsPe= 6Deficit = 1P =2 +Qe= 1CS' =2.5CS = 2PS = 2PS' =0.54.

Answer: (11). Given, Demand function:P=60-3QdSupply function:P=4+4Qs To find the equilibrium price…

In each of the following markets find the market equilibrium. Then consider the effect of a price floor (or ceiling) imposed by the government. Find the quantity demanded Qd, quantity supplied Qs and the corresponding surplus (or deficit) in the market. Demand: Supply: 1 Qd Price floor = 7 1 Qs PS = 8 Surplus =2 CS' = PS' = 1 P = 10- Pe= 6 P = 2 + Qe= 4 4.5 CS 8 11 Demand: |Supply: Surplus =1 2.3 CS' = P = 10 - 2 Qd Price floor = 2 Qs 2 7 Pe= 6 2 + P = CS = 4 P = P = Qe= 2 PS = 4 PS' = 5.3 Demand: Supply: 3 6 - 0.5 Qd Price ceiling = 3 Pe= 4 Deficit = 4 2 + 0.5 Qs CS = 4 CS' = PS' = Qe= 4 PS = 4 1 Demand: Supply: Surplus = 10 CS' = PS' = Deficit = 13 4 P = 18 - 2 Qd Price floor = 10 Pe= 6 P = 3 + 0.5 Qs Qe= 6 16 CS = 36 PS = 9 P = 14 - 0.5 Qd Price ceiling = 7 2 Qs PS = 16 24 5 Demand: Pe= 12 Supply: P = 4 + Qe= 4 CS' = 9.9 CS 4 PS' = 2.3 Demand: Supply: P = 24 - Surplus =:4 CS' = 3 Qd Price floor = 12 Pe= 9 P = 4 + 1 Qs Qe= 5 24 38 P = 30 - P = 16 P = 28 - P = CS = 25 P = 30 - P = CS PS = 13 PS' = 24 Demand: Supply: 0.5 Qd Price ceiling = 14 3 Qs 7 Pe= 26 Deficit = 28 2 + Qe= 8 CS' = 60 PS = 96 2 Qd Price floor = 24 3 Qs PS = 38 3 Qd Price floor = 21 2 Qs CS PS' = 24 Demand: Supply: 8 Pe= 18 Surplus =:5 CS' = 3 + Qe= 5 4 PS' = 36 Demand: Supply: Surplus =5 CS' = Pe= 15 5 + Qe= 5 14 CS ='38 PS = 25 PS' = 39 Demand: Supply: 4 Qd Price floor = 12 1 Qs PS = 8 3 Qd Price ceiling = 11 4 Qs P = 24 - Surplus =:5 CS' = 10 Pe= 8 4 + CS = 32 P = 60 - P = 4 18 PS' = Deficit = 15 CS' = 20 Demand: Supply: 11 Pe= 36 P = 96 4 + Qe= 8 81 CS PS = ## PS' = 6.1 Demand: Supply: Surplus = 9 CS' = PS' = 4 Qd Price floor = 8 P = 20 - P = 32 12 Pe= 4 2 + 0.5 Qs PS = 4 4 Qd Price ceiling = 4 4 Qs PS = 2 Qe= 4 18 CS 16 Demand: Supply: P = 10 - Pe= 6 Deficit = 1 CS' = PS' = 13 P = 2 + CS = 2 Qe= 1 2.5 0.5

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Costs Of Taxation

Section: Chapter Questions

Problem 10PA