The price-demand equation, D(x), and the price-supply equation, S(x), of a Slow Cooker are given below. k - x P = D(x) = and p =s(x) = 0.25x2 +7, for some constant k. 4 %3D %3D When the price is pegged at $15, the consumers' surplus is found to be $200. (a) Find k. (You will be able to solve for two values of k. Provide an explanation why one of these values is not feasible.) (b) Find the equilibrium price and equilibrium quantity using the value of k found in part (a). (c) Find the consumers' surplus at the equilibrium point. Interpret what this value represents. (d) Find the producers' surplus at the equilibrium point. Interpret what this value represents.

The price-demand equation, D(x), and the price-supply equation, S(x), of a Slow Cooker are given below. k - x P = D(x) = and p =s(x) = 0.25x2 +7, for some constant k. 4 %3D %3D When the price is pegged at $15, the consumers' surplus is found to be $200. (a) Find k. (You will be able to solve for two values of k. Provide an explanation why one of these values is not feasible.) (b) Find the equilibrium price and equilibrium quantity using the value of k found in part (a). (c) Find the consumers' surplus at the equilibrium point. Interpret what this value represents. (d) Find the producers' surplus at the equilibrium point. Interpret what this value represents.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter29: Resource Markets

Section: Chapter Questions

Problem 4E

See similar textbooks

Similar questions

Suppose market demand and supply are given by Qd = 300 - 4P and QS = -50 + 3P. The equilibrium price is: $35 $60 $40 $50
: A fixed cost of $50 thousand was incurred in setting up an operation. At time t months thereafter, the operation yields income at the rate of (20 – 0.3t) and incurs expenses at the rate of (10 – 0.1t); where both are in thousands of dollars per month. Sketch the graph. What is the optimal time to terminate the operation? What will total profit be at the optimal time of termination? Q#5: At market equilibrium, consumers demand 625,000 gallons of kerosene, whose supply function is, Ps(q) = 2.5 + 0.3 q3/2 , where q is in thousands of gallons and Ps(q) is in dollars per gallon. Compute producers’ surplus. Q#6: The demand function for a product is Pd(q) = 80 / (0.2 q + 1)2 , where q is in millions of tons and Pd (q) is in dollars per ton. Market equilibrium occurs at a demand for 15 million tons. Compute consumers’ surplus.
Assume that the demand function is equal to: QD = 5000 - 1000P Where the price range is P1.00 to P5.00, derive the demand schedule economics
A ski resort in the White Mountains has conducted market and cost studies, and has determined that the demand and supply for ski-lift tickets at their resort are represented by: Qd=1750 - 5P - 8PR + 2PB; Qs=50 + 20P - 3PE. In these equations, P represents the price of a full-day lift ticket, in dollars per ticket; PR is the price of a ski-rental package; PB is the price of a pint of beer at the local pub in the nearby town; and PE is the price per megawatt hour for the electricity used to run the chair lifts on the ski slopes. Based on the equations above, determine whether the beer in the local pub is a substitute or complement to skiing. Briefly explain your answer. Suppose the price of a ski-rental package is $20, the price of a pint of beer is $5, and the price of electricity is $150 per megawatt hour. Calculate equilibrium price and quantity of ski-lift tickets. Now consider the more general relationship between the price of lift tickets and the price of ski-rental packages.…
The demand and supply functions a firm producing a certain product are given respectively by: and , where p is the price per unit and quantities are in millions per year. How much consumer surplus (CS1) do consumers receive when price is P1 = $60?
Given the following supply and demand functions find the equilibrium price and quantity in the market: Qd=195-20P Qs=-5+5P
Assume quantities need not be integers. Demand in a competitive market is Qd(P)=120 – (4/10)*P. If 20 units are transacted, what is the lowest marginal benefit (i.e., MWTP) at which an item is purchased? Round to two decimal places and do not enter a currency symbol. If your answer is $1.125, enter 1.13.
It is known that the quantity demanded of a certain make of portable hair dryer is x hundred units/week and the corresponding wholesale unit price is p = 289 − 7x dollars. Determine the consumers' surplus if the market price is set at $10/unit. (Round your answer to two decimal places.)
The supply curve for product X is given by QXS = -520 + 20PX . a. Find the inverse supply curve
Predicting Changes in Equilibrium Price and Quantity Suppose that the market demand for farmed salmon is Qd = 12 – p and the market supply of farmed salmon is Qs = 9.6 + 0.5p – 0.2pt, where Q is the quantity of salmon in millions of tons per year, p is the price of salmon in dollars per pound, and pt is the price of tilapia in dollars per pound. The supply function demonstrates that the facilities that are used to farm salmon are also suitable for farming tilapia. a) Use a market diagram to demonstrate that the equilibrium price and quantity of salmon is implicitly a function of the price of tilapia. That is, show how a change in the price of tilapia will impact the market for farmed salmon. (No need to use numbers here, just sketch and explain.) b) Using the supply and demand functions, derive the relationship between the price of tilapia and the equilibrium price and quantity of salmon. You should ultimately calculate and . Check your work by calculating the impact of an increase in…
The market has demand and supply curves represented by:P 10+0.001QP 50-0.003QIf the price is held at $17.5, the change in total surplus is____*** if it is a decrease, then put a negative in from of it, do not add a plus sign. Round your answer to the nearest whole number.
The demand function of a market is:- Qd = 24P - 360 If the equilibrium price is $17 Find equilibrium quantity