QUESTION 7PriceP₂0NMBSMCDemandQuantitya₂a₁₂Refer to the graph above. What area) represents the producer surplus at the market solution (lemake?QUESTION 8PriceSMCPMCD E SY:NALMAmount ofElectricityRefer to the graph above. What area(s) represent(s) the producer surplus (firm's profits) at the market solution (Le.market equilibrium)?UPMCDemand

Note:- Since we can only answer one question at a time, we'll answer the first one. Please repost…

QUESTION 7 Price N 02 M Demand Quantity Fer to the graph above that area) represents the producer surplus at the market solution (le market equilibrium? QUESTION 8 Price SMC PMC D E S N M Amount of Electricity Refer to the graph above. What area(s) represent(s) the producer surplus (firm's profits) at the market solution (Le.market equilibrium)? SMC X PMC Demand

QUESTION 7 Price N 02 M Demand Quantity Fer to the graph above that area) represents the producer surplus at the market solution (le market equilibrium? QUESTION 8 Price SMC PMC D E S N M Amount of Electricity Refer to the graph above. What area(s) represent(s) the producer surplus (firm's profits) at the market solution (Le.market equilibrium)? SMC X PMC Demand

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 7PA

See similar textbooks

Similar questions

The car manufacturing market consists of100 identical factories, each with a marginalcost curve represented by MC =120 + 20where Q represents the amount of carsoffered.a) Derive the industry supply curve for cars.b) If the demand for cars is represented byP=250- 4Q, how many cars are bought atequilibrium?c) Calculate the aggregate consumer andproducer surplus at market equilibrium.
Write down a model of positive production externality with two firms, in which theproduction activities of one firm directly affects the production/cost of the other firm.State and explain the key assumptions of the model. Using the model, answer thefollowing questions:(a) Explain why the presence of a positive production externality could prevent therealisation of an efficient outcome.(b) Name a possible cure for the positive production externality and explain how itcould solve the inefficiency problem.
use diagramsa. What is the effect on the equilibrium price and quantity traded in market of theintroduction of a new technology that reduces costs of production for all firms?b. What is the effect on the equilibrium price and quantity traded in a market of a changein tastes that reduces the demand for the product?c. What is the effect on the equilibrium price and quantity traded in a market of theimposition of a tax per unit sold on suppliers?d. What is the effect on the equilibrium price and quantity traded in a market of thepayment of a subsidy per unit sold paid to suppliers?
Consider a Sraffa system that describes production with a surplus. Assume that the whole of thewage is variable. The number of commodities in the system is n. Some are non-basiccommodities.a. Write the price equations in matrix notation. (Make sure to mention the dimensions of thevectors and matrix in your equation). b. Explain the economic meaning of the A matrix and l vector. c. Identify the unknown and known variables of your system. d. How can you make the system determinate, i.e., make the number of equations equal tothe number of unknowns? e. State the economic meaning of the viability condition and express it mathematically. f. Assume that the viability condition is satisfied and the rate of profit is given exogenouslyat a level that is lower than the maximum rate of profit. Explain, with the help of therelevant theorem, why the solution for prices must be nonnegative. NOTE: You need to use only three equations, one for specifying the numeraire, thesecond for expressing the…
Directions: Provide what is asked in each number.1. Lizzy and Kris are both grade 11 students who are taking up ABM astheir specialization. As part of their Applied Economics subject anexperiment was given to them to find the equilibrium quantity and priceof Buko Juice in their school canteen. During the said experiment thefollowing data were collected by Lizzy and Kris. Fill out the missinginformation and find out the Equilibrium Price and Quantity by drawingits market equilibrium curve.
Two functions are given for supply and demandP=2QS^2+QS+7P=-QD^2-3QD+45 Can give us a fair competitionYou can use GeoGebra to solve this problem graphically, but as always you must describe each step and each idea a) Calculate consumer's surplus b) Calculate producer's surplus Draw good diagrams of the solutions to both a and b,
Consider the profit getting from selling x and y units of two commodities isgiven by as follows: i. P(x, y) = −0.1x2 - 0.2xy - 0.2y2 + 47x + 48y - 600. Find out theproduction levels for x and y that maximizes the profit. ii. Now assume that the total production is limited to 200 units. Find out theproduction levels that maximizes the profits.
A company is considering building a bridge across ariver. The bridge would cost $2 million to build andnothing to maintain. The following table shows thecompany’s anticipated demand over the lifetime ofthe bridge:Price per CrossingNumber of Crossings,in Thousands$8 07 1006 2005 3004 4003 5002 6001 7000 800a. If the company were to build the bridge, whatwould be its profit-maximizing price? Would thatlevel of output be efficient? Why or why not?b. If the company is interested in maximizing profit,should it build the bridge? What would be itsprofit or loss?c. If the government were to build the bridge, whatprice should it charge?d. Should the government build the bridge?Explain.
During the night, the electricity sector has a marginal cost of $1/MWh (megawatt-hour) forthe first 100 MWh produced (from wind turbines), and $20/MWh for each additional unit (from gasgenerators). During the day, they have a marginal cost of $1/MWh (megawatt-hour) for the first 50MWh produced (from solar panels), and $20/MWh for each additional unit (from gas generators).Nighttime and daytime demand are given by QnightD = 50 −P and QdayD = 200 −P , respectively.What are the market quantity and price during the day, and the market quantity and price at night?This is a model of the wholesale market for electricity, which you can think of as being competitive,but there is no resale between night and day.
Say in a market we haveDemand is P = 5 – 0.005QSupply is P = 0.00125Qa-you will have a graph with price on the vertical axis and quantity on the horizontal axis formost parts of this problem. You will want to show intercept values and equilibrium values withthe specific values from the problem (when you graph the supply show it go out at least to thesame level of Q as the Q intercept for the demand curve).b-what are the equilibrium price and quantity traded in the market?c-say the government levies an excise tax in the market of 50 cents that renders the supply tonow be P = .00125Q + 0.5 (essentially the supply curve shifts up by 50 cents at each quantity).What are the new equilibrium price and quantity traded in the market with this excise tax?d-did the market price increase by as much as the 50 cent tax? (compare the market priceincrease with the amount of the tax of 50 cents)e-what is then loss in consumer surplus from the tax? Do consumers like excise taxes?f-what is the elasticity…
Considermarketforagoodcharacterizedbythefollowinginverse demand and supply functions: PX = 10 − 2QX and PX = 2 + 2QX.a. Compute the surplus received by consumers and producers.b. Now suppose all manufacturers of this good are to pay a lump tax of $0.10that will be used by the government regulators to defray some of the environmental cost imposed by this good’s production. What will be the new surplus received by consumers and producers?c. Based on your results in part ‘b’ above, how will you evaluate the impact of this tax policy on the society? Explain
Jason Stilton is the chief executive officer of RightLiving a company that buys life insurance policies at a discount from terminally ill persons and sells the policies to investors for 85% of the value of the future benefit. The patients recieve the cash to use for medical and other expenses and the investors are guaranteed a positive return on thier investment. The diffreance between the purchace and sale prices is the RightLivinf Profit. Stilton is aware that some sick patients may obtain insurance policies through fraud (Not revealing thier illness on the insurance application). An insurance company that discovers such will cancel the policy and refuse to pay. Stilton beleives that most of the policies he has purchased are legitimate, but he knows some are probably not. Question Using IDDR approch, discuss the decision process Stilton should use in deciding whether to disclose the risk of fraudulent policies to potential investors.