Price (S/unit) $100- 90 588888888 80 70 60- 50- 40 30- 20 10- D₁ 0 10 20 30 40 50 60 70 80 90 100 Quantity Suppose the government sets a price floor of $60/unit, what is the values of producer surplus after the price change?
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- Qd=120-3P Qs =30 At the equilibrium price and quantity, what is producer surplus?demand equations QD = 3550 - 266P supply equations QS = 1800 + 240P Calculate initial consumer surplus and producer surplus. Now assume that government intervenes in the market through ceiling price (assume a value) and or floor price (assume a value). Find the change in welfare (DWL) loss and the new consumer surplus and producer surplus. Do you support these types of interventions?Question 3 The market demand and supply functions for cotton are: QD =10–0.04PandQS =38P–20. Calculate the consumer and producer surplus. To assist cotton farmers, suppose a subsidy of R0.10 a unit is implemented. Calculate the new level of consumer and producer surplus. Did the increase in consumer and producer surplus exceed the increased government spending necessary to finance the subsidy?
- Q4: Consider the market (supply and demand) for Wheat.Qd = 100 - 0.6P…………1Qs = -30 + 2P……...…...2a. Find the market equilibrium price and quantity?b. Find the market equilibrium price and quantity After imposing an ad valorem tax on production by 5% of good price.c. Find the market equilibrium price and quantity if producers receive a production subsidy of 10 SR per unit produced.Calculate the before tax consumer surplus, producer surplus, and social welfare. P = 20 - .01Qd P = .005Qs + 5QD = 160 -5P QS = -11 + 4P In addition, the government imposed a $3.00 tax on the buyer. Calculate the following: (d) Producer surplus after the tax. (e) Deadweight loss. (f) Government revenue.
- The supply and demand curves for corn are as follows: QD = 3,750 - 725P QS = 920 + 690P,where Q = millions of bushels and P = price per bushel. a. Calculate the equilibrium price and quantity that would prevail in the free market. b. The government has imposed a R2.50 per bushel support price. How much corn will the government be forced to purchase? c. Calculate the loss in consumer surplus that would occur under the support program.Question 4 Given: QD = 160 -5P QS = -11 + 4P In addition, the government imposed a $3.00 tax on the buyer. Calculate the following: (a) The equilibrium price and equilibrium quantity. (b) Consumer and producer surplus before the tax. (c) Consumer surplus after the tax. (d) Producer surplus after the tax. (e) Deadweight loss. (f) Government revenue. solution for d ,e and fQd=160-5P and QS=-11+4P. Governement imposed a tax of $3.00 on the buyer. Calculate: a. Producer surplus after tax b. Deadweight loss c. Government revenue
- Given the demand and supply equations : P + 1/2QD = 10 3P - Qs = 17 a) Find the equilibrium price and quantity. b) Tax of $2 per good is imposed, find the new equilibrium price and quantity. c) Find the extra pay by the supplier and government tax revenue.A company manufactures and sells x television sets per month. The monthly cost and price-demand equations are C(x)=74,000+40x and p(x)=250−x/20 0 ≤ x ≤ 5000. (A) Find the maximum revenue. (B) Find the maximum profit, the production level that will realize the maximum profit, and the price the company should charge for each television set. (C) If the government decides to tax the company $4 for each set it produces, how many sets should the company manufacture each month to maximize its profit? What is the maximum profit? What should the company charge for each set?Qs= 30p-60 Qd= 105-3p The government imposes a maximum price of 4.8. What will be the Consumer surplus , producer surplus and dead weight loss
