PART A - Questions 1-9 Consider a market where demand is D: P = 60 – 3Q and supply is S: P = 4 + 4Q. 1. Equilibrium quantity Qe is a. $8 b. $9 c. $10 d. $11 2. Equilibrium is price Pe а. 33 b. 34 с. 35 d. 36 3. Consumer surplus CS is a. $94 b. $95 c. $96 d. $97
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- Quanity demand =40-P Quanity supply =P-4 How much is total consumer surplus ar the equilibrium price in this market?(Q.3.3.) Suppose the demand and supply equations for a particular good are given as follow: QD - 140 - 2P and Qs - 4P - 10. The market for this good is currently in equilibrium. (Q.3.10) At the current market price, is the market outcome efficient? If not, state the relationship between the current market price and the efficient market price, and the current quantity traded and the efficient quantity traded. At the current market price, the market outcome_______________The current market price__________________the efficlent price, and the current quantity traded___________the efficient quantity. (Please explain the response. Do not simply provide an answer. Thank you. Option choices are: is efficient, is equal to, is greater than, is inefficient, or is less than than.)E4 In a competitive market, the market demand is Qd = 60 −6P and the market supply is Qs = 4P. A price ceiling of $4 will result in A. A shortage of 18 units. B. A shortage of 20 units. C. A surplus of 30 units. D. A surplus of 12 units. E. Neither a surplus nor a shortage.
- A4 Suppose that good X is traded in a competitive market. The market clearing price is $25.00 and the quantity supplied is 200. A proposed change in government policy is expected to cause the market price to increase by $1.50. Previous studies suggest that the price elasticity of supply is about 1.5. Assuming the supply schedule is linear, calculate the change in producer surplus from the government's policy shift. Round your answer to 1 decimal place and report it in the box below. Don't include the dollar sign, but if producer surplus decreases, be sure to include a negative sign in your response. your answer isPrice per Bushel Quantity Demanded (bushels) Quantity Supplied (bushels) $3 36,000 0 6 30,000 3,000 9 24,000 6,000 12 19,000 10,000 15 15,000 15,000 18 10,000 21,000 21 7,000 28,000 How many bushels will be sold if the market price is $9 per bushel? If the market price is $9 per bushel, what must happen to restore equilibrium in the market? At what price will suppliers be able to sell 24,000 bushels of corn?In a competitive market, the market demand is Qd = 60 − 6P and the market supply is Qs = 4P. A price ceiling of $3 will result in a:
- 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, orMaintain the price support and increase the number of quotas. Suppose now that the government decides to increase the number of quotas available to 72 units, but it keeps the price support at the current level of $72. Calculate: i) the consumer Surplusii) the producer surplusiii) deadweight loss HINT: Sketch the supply and demand equations. Which of the two options would be preferred by the producers? Which of the two options would be preferred by society as a whole?Find the equilibrium price and quantity for the following markets : Qs = - 45 + 8P Qd = 125 – 2P1. The old demand was Qd = 180 – 2P. 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. a. Suppose that the government decides to maintain the number of quotas and let the market adjust. Calculate the following: Price observed in the market The consumer surplus The producer surplus Deadweight loss b. Suppose now that the government decides to increase the number of quotas available to 72 units, but it keeps the price support at the current level of $72. Calculate the following: The consumer surplus The producer surplus Deadweight loss
- 8- When the quantity demanded for a commodity is 400 units but the quantity supplied is 575 units, it is called ________. a. Equilibrium of supply b. Shortage of supply c. Equilibrium of demand d. Surplus of supply1. The market price is $________ per bottle.2. The equilibrium quantity is ________ bottles.3. The price at which suppliers will not put any bottles on the market is $_______.4. What is the consumers’ surplus in the market at equilibrium $________ (assume the demand curve starts at $38)5. What is the producers’ surplus in this market at equilibrium $_______Table 4 The Market for Car-Seat Heaters Price (dollars per heater) Quantity Demanded (heaters per month) Quantity Supplied (heaters per month) 40 50 60 70 80 90 100 500 450 400 350 300 250 200 300 350 400 450 500 550 600 a) Refer to Table 4 The equilibrium price is $________ and the equilibrium quantity is ________ heaters per month. b) Refer to Table 5 If the price is set at $80, there will be a c) Refer to Table 5 Suppose the cost of production rises and supply decreases by 100 units at each price. The new equilibrium price is $________ and equilibrium quantity is ________ units. d) Refer to Table 5 Suppose a problem develops with car-seat heaters - they malfunction and occasionally cause serious burns. As a result, demand decreases by 100 heaters at each price. The new equilibrium price is $________ and the new equilibrium quantity is ________ heaters per month. e) Refer to Table 5 Suppose a problem develops with car-seat heaters - they malfunction and…