Please answer Part C iii, iv. Thank you. A market has a demand function given by the equation Qd = 180 - 2p, and a supply function given by the equation Qs = -15 + P. The market is government regulated with a price support per unit and production quotas. (a) If the price is set at $72 per unit, what production quota is needed to make sure there are no shortgages or surpluses? Answer 36 (b) Considering th eprice support and the quota, calculate: (i) the consumer surplus Answer 324 (ii) the producer surplus Answer 1404 (iii) deadweight loss Answer 252 (c) Due to good weather, there is an increase in 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 decided to maintain the number of quotas and let the market adjust calculate: (i) price observed in the market Answer 46 (ii) the consumer surplus Answer 576 (iii) the producer surplus (iv) deadweight loss (d) 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 surplus (ii) the producer surplus (iii) deadweight loss (e) Which of the two options would be preferred by yhe producers? (f) Which of the two options would be preferred by society as a whole?
Please answer Part C iii, iv. Thank you.
A market has a
(a) If the price is set at $72 per unit, what production quota is needed to make sure there are no shortgages or surpluses? Answer 36
(b) Considering th eprice support and the quota, calculate:
(i) the
(ii) the
(iii)
(c) Due to good weather, there is an increase in 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 decided to maintain the number of quotas and let the market adjust calculate:
(i) price observed in the market Answer 46
(ii) the consumer surplus Answer 576
(iii) the producer surplus
(iv) deadweight loss
(d) 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
(ii) the producer surplus
(iii) deadweight loss
(e) Which of the two options would be preferred by yhe producers?
(f) Which of the two options would be preferred by society as a whole?
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