Suppose demand and supply are given by Qd = 60 - P and Qs  = 1.0P - 20. a. What are the equilibrium quantity and price in this market? Equilibrium quantity:  Equilibrium price: $  b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $52 is imposed in this market. Quantity demanded:  Quantity supplied:  Surplus:  c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $36 is imposed in the market. Also, determine the full economic price paid by consumers. Quantity demanded:  Quantity supplied:  Shortage:  Full economic price: $    Question 2: Consider a market where supply and demand are given by QXS = -14 + PX and QXd = 82 - 2PX. Suppose the government imposes a price floor of $37, and agrees to purchase and discard any and all units consumers do not buy at the floor price of $37 per unit.   Instructions: Enter your responses rounded to the nearest penny (two decimal places).   a. Determine the cost to the government of buying firms’ unsold units. $  b. Compute the lost social welfare (deadweight loss) that stems from the $37 price floor.

Microeconomics
13th Edition
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter3: Supply And Demand: Theory
Section: Chapter Questions
Problem 24QP
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Question 1: Suppose demand and supply are given by Qd = 60 - P and Qs  = 1.0P - 20.

a. What are the equilibrium quantity and price in this market?

Equilibrium quantity: 

Equilibrium price: $ 

b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $52 is imposed in this market.

Quantity demanded: 

Quantity supplied: 

Surplus: 

c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $36 is imposed in the market. Also, determine the full economic price paid by consumers.

Quantity demanded: 

Quantity supplied: 

Shortage: 

Full economic price: $ 

 

Question 2:

Consider a market where supply and demand are given by QXS = -14 + PX and QXd = 82 - 2PX. Suppose the government imposes a price floor of $37, and agrees to purchase and discard any and all units consumers do not buy at the floor price of $37 per unit.
 

Instructions: Enter your responses rounded to the nearest penny (two decimal places).

 

a. Determine the cost to the government of buying firms’ unsold units.



b. Compute the lost social welfare (deadweight loss) that stems from the $37 price floor.

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