Suppose the government of utopia set a maximum price R2.50 per unit of electricity. Explain and show in the graph drawn in the effect of the government intervention in the electricity market
Q: The town council is contemplating the imposition of a R350 per month rent ceiling on apartment rooms…
A: "Since you have posted a question with multiple subparts, we will solve the first three subparts for…
Q: The demand and supply for bicycles is given by: Q = 1000 - 10P and supply is: Q³ = 2P - 20 6.…
A: Given; Supply function; Qs=2P-20 Demand function; Qd=1000-10P Sales tax= 20%
Q: Suppose that the demand curve for cigarettes in Euroland is given by QD = 26.9 − 1.71P , and that…
A: Here, demand and supply functions of cigarette are given and government is imposing €0.40 tax on…
Q: Consider the market for ice cream cones. Suppose that supply in this market is given by P^S = Q^S…
A: The equilibrium price and equilibrium quantity of a good sold in the market are determined by the…
Q: Suppose there is only one movie theatre in a town and the equilibrium price and quantity for movie…
A: Initially, the equilibrium price is $7 and the quantity is 940 visits. After the imposition of a tax…
Q: Chick-Thai is the only store sells chicken sandwiches around Santa Barabar, where the inverse demand…
A: Marginal cost(MC) : when there is change in output level then cost will also changes . MC=△TC△Q
Q: The Australian Government believes that maintaining a viable airline industry is essential to the…
A: We know at equilibrium the market demand equals the market supply. Which means that:…
Q: On the Virus island the inverse demand function for masks is given by the formula P=360-Q, where P -…
A: We know that price is determined by the market forces demand and supply curve at its intersection at…
Q: D2 (A) (B) S, P S2 P (C) (D) Which of the diagrams illustrates the effect of a governmental subsidy…
A: The answer is C only
Q: In the market for gasoline the demand curve is D: Q = 1426 - P and the supply curve is S: Q = P.…
A: When tax is placed on consumers demand decreases and it shifts to the left.
Q: Suppose the supply and demand curves for gas are shown in the figure below. Answer the following…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: Suppose bread is subsidized in a small Caribbean nation with a high percentage of citizens who live…
A: Subsidy to sellers reduces the cost of production. This encourages sellers to increase production.…
Q: The demand function of gasoline is Q = 50 – 4.9P, and the supply function is Q = 6+ 2P. Suppose that…
A: The deadweight loss is an economic loss to society. It is the area of a triangle. It is created by…
Q: In the town of "One Horse" there is one movie theater. Two groups of consumers, adults (A) and…
A: “Since you have posted multiple questions, as per the guidelines we would only be able to solve the…
Q: The demand and supply curves for instant oatmeal are as follows: Qa = 100.5Pd, where Qa is the…
A: Equilibrium in the competitive market is achieved where demand equals supply
Q: The demand and supply curves for a price taking firm are as follows: Qd = 10- 0.5 Pd Qs= -2+Ps,…
A: A market refers to the point where consumer and producers for the particular commodity interacts.…
Q: The figure above shows the market for electricity. If there is no regulation in the electricity…
A: Below is the edited graph:
Q: Which of the following is least likely to be associated with market failure, and is consequently…
A: Market failure refers to a situation when the distribution of goods and services is inefficient.…
Q: Suppose demand and supply for services of surgeons in Australia each day are given below, where…
A: Producer surplus is the difference between the price that the producer actually gets and the price…
Q: The market demand and supply functions for pork are: Q₂ = 2,000-500P and Qs = 800+100P. To help pork…
A: Buyers will demand less of an economic good at higher prices, according to the law of demand.. in…
Q: The market supply and demand for solar panels are given respectively by QS = 80P – 5,000 and QD =…
A: A. Qs =80P-5,000 Qd = 65,000-20P Where Qs is quantity supplied and Qd is quantity demanded ,P is…
Q: Education benefits society as a whole. That is why, among other things, studies at colleges and…
A: Subsidies A benefit supplied to a person, company, or institution is known as a subsidy, and it is…
Q: What is happening if governments sets a maximum price for electricity that is below the market…
A: If an upper price limit is set on a commodity and sellers are not allowed to sell a commodity above…
Q: Question 2 The market for electricity in Utopia is characterised by the following equations Qd = 100…
A: We have been given : Qd = 100 - 5 P Qs = 50 + 5 P
Q: ased on Table 1, in order to help the consumer, the government imposes a price control of RM0.60 per…
A: There are two types of price control that is price floor for sellers and price ceiling for…
Q: please plot a graph showing the effect of a government subsidy on the market for surgical masks.
A: The amount given by the government to the producer is known as a subsidy. The main aim of subsidy is…
Q: Because of COVID-19 most people are staying indoors, yet they cannot afford online streaming movies,…
A: I think government should not regulate the price of online streaming because it will lead to…
Q: The market for used phones is perfectly competitive. Suppose for simplicity, we have the potential…
A: Supply Curve: - supply curve is the graphical way of showing the relationship between the quantity…
Q: Assume that the monthly demand for Gala apple in the US is given by q=1200-300p and quantity is in…
A: Monthly demand for Gala apple; q=1200-300p Monthly supply; q=-200+400p for p>$0.5 At…
Q: The equilibrium price is € per flu jab, and the equilibrium quantity is jabs per day. If the…
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…
Q: because of Covid-19 most people are staying indoors, yet they cannot afford online streaming movies…
A: Because of Covid-19, most people are staying indoors to save themselves from the virus. This…
Q: consider a market with a large number of firms, an upward sloping supply curve S0, and a downward…
A: In this question we have find the socially optimal output level and the presence (or absence) of…
Q: Suppliers of breakfast cereal persuade the government to impose a binding price floor of $5 per box…
A: When the suppliers persuade the government to impose the binding price floor of 5 $, the result will…
Q: What happened to supply curve and equilibrium price and quantity when Government provides subsidy to…
A: (Q) What happened to the supply curve and equilibrium price and quantity when the Government…
Q: .12) In the effort to reduce alcohol consumption, the government is considering a $1 tax on each…
A: Hey, Thank you for the question. According to our policy we can only answer up to 3 subparts per…
Q: Price per dozen Dozens of doughnuts Dozens of doughnuts…
A: The equilibrium price of a commodity is the price at which the quantity demanded of the commodity…
Q: Demand for apartments in town is D (x)=860 – 3x, and the supply is S(x) =500+9x, %3D where x is the…
A:
Q: *You must show your work. Consider a competitive market with the following market supply and demand…
A: The demand and supply functions are given by, PD = 95 - 0.05QPS = 1.5 + 0.65Q (a) In a competitive…
Q: 12) In the effort to reduce alcohol consumption, the government is considering a $1 tax on each…
A: Given: QD= 500,000 – 20,000*PQS= 30,000*PTherefore, at equilibrium,QD=QS500000 – 20000P =…
Q: n 2014, the U.S. House of Representatives approved a new farm bill establishing the Margin…
A: We have given the following information
Q: In the market for used cars, the demand and supply equations are given by Qd = Qs = 0.1P+ 5, 000,…
A:
Q: Suppose a university has 5,000 parking spaces. Show by a supply and demand diagram which side of the…
A: The supply curve determines the quantity that the suppliers are willing to supply at a given price.…
Q: The market for used phones is perfectly competitive. The Marginal Willingness to pay (MWTP) and the…
A: Buyer MWTP Seller MC Consumer surplus Producer surplus C 222 W 228 - 6 A 346 V 428 82 - E 394…
Q: For years the government has subsidized higher education through grants; consider the demand and…
A:
Q: In 2014, the U.S. House of Representatives approved a new farm bill establishing the Margin…
A: The equilibrium price and equilibrium quantity of a good sold in the market are determined by the…
Q: Suppose the graph shows the market of wheat. The equilibrium price is $25 per 100 bushels of wheat.…
A: The producer surplus would result in the portion of the area between the price and the above the…
Q: Suppose the figure represents a local cattle market. What would be the effect on this market of the…
A: Price ceiling is that price which are lies below that level of prices which are determined by market…
Suppose the government of utopia set a maximum
Step by step
Solved in 2 steps with 1 images
- Use the graph to answer the question that follows. Without government intervention, this market will charge a price lower than optimal by Pc higher than optimal by Pc lower than optimal by Pc − Pe higher than optimal by Pc − Pe lower than optimal by Pc − PpWood is used extensively for chairs and is produced in the market. There are equations for the Supply and Inverse Demand of wood for chairs that model its Supply and Demand graph. These equations are (for supply), P = 2Qs, and (for Inverse Demand), P = 10 - 2Qd. Likewise, wood has become very expensive, so the government places a price ceiling of $1. (Part I) Draw the market equilibrium with the government intervention (Q**, P**) of the price ceiling. Please label the graph for slopes, equilibrium points, price ceiling, etc. (Part II) What is the market equilibrium with the intervention of the government (Q**, P**)? (Part III) Based on what you have calculated so far and the given information, is there excess demand or excess supply in the equilibrium? If there is, indicate specifically the type of excess and determine the value of this excess. (Part IV) Are consumers benefiting from this price ceiling in this given scenario? Please compare the market equilibrium without any…Suppose bread is subsidized in a small Caribbean nation with a high percentage of citizens who live in poverty with a following demand function: P = 300 – 5 Qwhere P is the price and Q is quantity demanded The subsidy is paid to suppliers of bread by the government in the amount of 50 cents per loaf. In the absence of the subsidy, the price of bread would be 80 cents per loaf. Assuming that the supply of bread is perfectly elastic at the 80 cents price, show in a diagram the effect of the subsidy on the market equilibrium price of bread. Assuming no externalities, show that the subsidy will result in more than the efficient amount of bread being produced. Show the excess burden of the subsidy on your graph and compute its dollars.
- The demand and supply of ethanol are given by QD = 8,000 – 2,000P and QS = 1,000P – 1,000, where P is price per gallon and Q measures gallons per minute. Suppose the government subsidizes ethanol at $0.30 a gallon that the producer pays. What does the subsidy cost the government? After the subsidy, what is the producer surplus? After the subsidy, what is the consumer surplus? After the subsidy, what is the deadweight loss?Consider a free market with demand equal to QQ = 900 − 10PP and supply equal to QQ = 20PP. Now the government imposes a $15 per unit subsidy on the production of the good. What is the consumersurplus now? The producer surplus? Why is there a deadweight loss associated with the subsidy, and whatis the size of this loss? Demonstrate in a graph..12) In the effort to reduce alcohol consumption, the government is considering a $1 tax on each gallon of liquor sold. The legal incidence of the tax will be on producers. Suppose the demand for alcohol is described by Q D = 500,000 – 20,000*P where Q D is quantity and P is price per gallon (NOTE: the inverse demand curve would be P = 25 – 0.00005*Q D ). The supply curve is described at Q S = 30,000*P (NOTE: This would make the MC curve MC = (1/30,000)*Q S ). a. Draw the supply and demand curves before the tax is imposed. Calculate the equilibrium price and quantity. b. Add the tax to the supply curve. Calculate the new price per gallon consumers pay, the price per gallon producers receive, and the new equilibrium quantity. c. Calculate the amount of revenue the tax generates. How much of the tax is paid by consumers? How much of the tax is paid by producers? d. Calculate the elasticity of demand at the original equilibrium price. Calculate the elasticity of supply at the original…
- 12) In the effort to reduce alcohol consumption, the government is considering a $1 tax on each gallon of liquor sold. The legal incidence of the tax will be on producers. Suppose the demand for alcohol is described by Q D = 500,000 – 20,000*P where Q D is quantity and P is price per gallon (NOTE: the inverse demand curve would be P = 25 – 0.00005*Q D ). The supply curve is described at Q S = 30,000*P (NOTE: This would make the MC curve MC = (1/30,000)*Q S ). D. Calculate the elasticity of demand at the original equilibrium price. Calculate the elasticity of supply at the original equilibrium price. e. Calculate the deadweight loss of the tax. f. Suppose that if you were to disaggregate the market demand into young drinkers and old drinkers you would find that the demand for alcohol is more elastic among young drinkers than old drinkers. Which group of drinkers will change their behavior more? Which group of drinkers will bear the bigger burden of the proportion of the tax that…Suppose the government of the island has decided to make tomatoes more affordable to consumers by imposing a fixed per unit subsidy. Thus, start with the original demand (Qd = 50 – 5P) and supply (Qs = 5P – 25) and analyze this new intervention, the subsidy. The subsidy works like this: tomato sellers receive a $4 refund from the government for each kilogram of tomatoes they sell to consumers. What is the price that the producers will effectively earn for their tomatoes, inclusive of the subsidy? How much will the government spend on tomato subsidies in this case in total? (Recall the units of measurement: P is the price in dollars per kilogram of tomatoes; and Q is the quantity of tomatoes, expressed in thousands of kilograms.) Produce a new graph depicting the new, post-subsidy equilibrium complete with (solved) values for the new price and quantity. Please include the original supply curve in this graph, in addition to the new “effective supply” curve; and clearly label the shift…In a town behind the local mountains, 3 individuals each buy flowers following theirindividual demands P = 8 − Q and 2 individuals each follow their individual demand P = 3 −Q. For prices between $0 to $3, the town’s aggregate demand for flowers is given by(a) P = 11 − 2Q(b) P = 30 − 5Q(c) P = 30 −Q5(d) P = 6 −Q5(e) None of the above
- The market for jelly has a supply and demand given by the following: QD=200–10p QS=20p–100 (a) What is the consumer surplus and producer surplus? (b) Suppose to aid families, the government instates a price ceiling of 9. What is the resulting CS and PS. What is the deadweight loss? (c) Unhappy with the resulting shortages of jelly, the government removes the price ceiling and replaces it with a subsidy to consumers. What subsidy would be required to lower the price consumers pay to 9? (d) What is the resulting CS, PS from the subsidy? (e) How much does the subsidy cost the government? What is the DWL?Price per dozen Dozens of doughnuts Dozens of doughnuts demanded supplied $5.00 12,000 24,000 4.25 15,000 21,000 3.50 18,000 18,000 2.75 21,000 15,000 2.00 25,000 10,000 10. Suppose that a tax of $1.50 per dozen is levied by the government on producers. What is the new equilibrium quantity? What is the new equilibrium price?Suppose the government of the island has decided to make tomatoes more affordable to consumers by imposing a fixed per unit subsidy. Thus, start with the original demand (Qd = 50 – 5P) and supply (Qs = 5P – 25) and analyze this new intervention, the subsidy. The subsidy works like this: tomato sellers receive a $4 refund from the government for each kilogram of tomatoes they sell to consumers.