The diagram to the right shows a market in which a price floor has been imposed. Identify the following (enter all values as integers). a. The deadweight loss is $ C 6.75 5.75--A. 84.75 3.75 2.75 B D FL C m 30,000 60,0
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- PDemand QDemand PSupply QSupply $10 0 $1 2 $9 3 $2 4 $8 6 $3 6 $7 9 $4 8 $6 12 $5 10 $5 15 $6 12 $4 18 $7 14 If the Government creates a quota of 6 units to reduce the consumption of the dangerous product, what will the price of the good be in the marketplace? How much deadweight loss is there? How much of the deadweight loss came from the consumers?is 3-4) K H G 0 F B 50 100 O A. BCF. OB. ACG. O C. DCE. O D. ACH. O E. HCG. D < E Question 3 of 24 S -D 150 200 250 Quantity (units) N Look at Figure 4.5.3. If If quantity is 200, deadweight loss is area > This qui This queDonna runs an inn and charges $300 a night fora room, which equals her cost. Sam, Harry, andBill are three potential customers willing to pay$500, $325, and $250, respectively. When thegovernment levies a tax on innkeepers of $50 pernight of occupancy, Donna raises her price to $350.The deadweight loss of the tax isa. $25.b. $50.c. $100.d. $150.
- Sophie pays Sky $50 to mow her lawn every week.When the government levies a mowing tax of $10 onSky, he raises his price to $60. Sophie continues tohire him at the higher price. What is the change inproducer surplus, change in consumer surplus, anddeadweight loss?a. $0, $0, $10b. $0, −$10, $0c. 1$10, −$10, $10d. 1$10, −$10, $0Your grandmother likes old-fashioned yard salesand doesn’t understand why everyone is so excitedabout eBay. Explain to her why the creation of amarket that enables people who don’t live in thesame town to buy and sell used goods increasestotal surplus over the yard-sale market.Please no written by hand solution In Example 9.1 LOADING... , we calculated the gains and losses from price controls on natural gas and found that there was a deadweight loss of $5.68 billion. This calculation was based on a price of oil of $50 per barrel and utilized the following equations: Supply: QS = 15.90 + 0.72PG + 0.05PO Demand: QD = 0.02minus 1.8PG + 0.69PO where QS and QD are the quantities supplied and demanded, each measured in trillion cubic feet (Tcf), PG is the price of natural gas in dollars per thousand cubic feet ($/mcf), and PO is the price of oil in dollars per barrel ($/b). If the price of oil were $65.00 per barrel, what would be the free-market price of gas? With a $65.00 price of oil per barrel, the free-market price of gas would be $nothing per thousand cubic foot. (Enter your response rounded to two decimal places.)
- 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? Explain2. Consider a competitive market characterized by the following marketdemand and supply curves.Qd=10000-10P Qs=40P-2000If the government enacts a binding price floor at 500, calculate the resultingconsumer surplus, producer surplus, and deadweight loss.Hint: a diagram might help. Show your work.In a country a government chooses to increase the tax on gas for $0.20 per gallon. Though the price of gas after tax goes up only by $0.15. Does the gast station collection enough tax or not?
- a. The market demand and supply functions for VCR movie rentals are:QD=10-0.04P and QS=3.8P+4.Suppose that VCR movie rentals are taxed at $0.25 per unit. Calculate:i. the equilibrium quantity and price, point elasticity of demand in equilibrium andproducer surplus without tax.ii. the revenues generated by the tax, the loss in producer surplus and percentageof the burden of the tax falls on producers?b. Determine the "rule-of-thumb" price when the monopolist has a marginal cost of $25and the price elasticity of demand of -3.0.The cost of natural gas sky rocketed following the Russian invasion of Ukraine. In response, governments in Europe considered implementing a price cap on natural gas. Suppose the market rate for natural gas is $1 per kWh (kilowatt hour, a measure of power), and the government proposes a price cap of $0.75 per kWh. Which of the following statements are true? (Select all that apply.) Question 3Answer a. The price cap would make natural gas more expensive. b. Due to the low price of gas, producers are less likely to invest in gas production. c. The government could alleviate the issue through a subsidy instead. d. There will be a shortage of natural gas. e. The government could alleviate the issues by taxing gas producers. f. As a result of the price cap, we would expect to see new natural gas wells being developed. g. There will be an excess supply of natural gas. h. The price cap will have no effect on the market.Demand and supply equations for housing market per month are given below.• Demand for housing: ?? = 2500 − 0.5 ?• Supply of housing: ?? = −500 + ? A) Suppose that the government set a rent ceiling at $1800. What are the quantities ofhousing supplied and demanded at this price? In this case, is there a shortage orsurplus of houses?B) How does the price ceiling affect the efficiency in the housing market?C) Calculate the deadweight loss in the housing market after the price ceiling isimposed by the government.D) Calculate the potential spending for housing search activities.
