Question 6 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. (NOTE: A production quota is a restriction on the quantity of the good that can be produced. Firms are not allowed to produce more than the quota) %3D (a) If the price is set at $72 per unit, what production quota is needed to make sure there are no shortages or surpluses? HINT: Sketch the supply and demand equations. Answer: 36 Considering the price support and the quota, calculate ) the consumer surplus, Answer: 324
Question 6 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. (NOTE: A production quota is a restriction on the quantity of the good that can be produced. Firms are not allowed to produce more than the quota) %3D (a) If the price is set at $72 per unit, what production quota is needed to make sure there are no shortages or surpluses? HINT: Sketch the supply and demand equations. Answer: 36 Considering the price support and the quota, calculate ) the consumer surplus, Answer: 324
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter9: Monopoly
Section: Chapter Questions
Problem 1QFR
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Transcribed Image Text:Question 6
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. (NOTE: A production quota is a restriction on the quantity of the good that can be produced.
Firms are not allowed to produce more than the quota)
(a) If the price is set at $72 per unit, what production quota is needed to make sure there are no shortages or
surpluses?
HINT: Sketch the supply and demand equations.
Answer:
36
Considering the price support and the quota, calculate
() the consumer surplus,
Answer:
324
Transcribed Image Text:Answer:
324
(ii) the producer surplus,
Answer:
1404
(ii) deadweight loss,
Answer: 252
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