Suppose the market demand for organic grass-fed beef is given by Q=100-2P and the supply is given by Q= P/2 (quantity is given in thousand pounds). A) Find the equilibrium price of a pound of beef and the equilibrium quantity. B) Find the consumer surplus (CS) and producer surplus (PS) at the market equilibrium point. C) How will the equilibrium change if the government imposes a price ceiling of $20/pound?
Suppose the market demand for organic grass-fed beef is given by Q=100-2P and the supply is given by Q= P/2 (quantity is given in thousand pounds). A) Find the
B) Find the
C) How will the equilibrium change if the government imposes a
D) Show this market with the price ceiling in a supply and demand graph.
E) Consider that the consumers who bought the beef at $20/pound are the ones with the highest
F) What is the
G) What would happen in this market if, instead, the consumers who bought the beef were the ones with the lowest willingness to pay (scenario 2)? (Hint: You don’t have to show it mathematically, or graphically, but write in words what you’d expect to happen with CSnew, PSnew, and DWL in scenario 2).
Step by step
Solved in 5 steps with 2 images
