Use the accompanying graph to answer these questions. Price of X ($) 20 units 18- 16 14 12- 10- 8 00 6- 4 2 0 3 units ST Quantity of Good X a. Suppose demand is D and supply is SU. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price Shortage: Full economic price: $[ b. Suppose demand is D and supply is SO. If a price floor of $12 is imposed, what is the resulting surplus? What is the cost to the government of purchasing any and all unsold units? Surplus: Cost to government: $[ c. Suppose demand is D and supply is so so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? Equilibrium price paid by consumers: $ Price received by producers: $ Number of units sold: [ so d. Calculate the level of consumer and producer surplus when demand and supply are given by D and SO respectively. Consumer surplus: $
Use the accompanying graph to answer these questions. Price of X ($) 20 units 18- 16 14 12- 10- 8 00 6- 4 2 0 3 units ST Quantity of Good X a. Suppose demand is D and supply is SU. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price Shortage: Full economic price: $[ b. Suppose demand is D and supply is SO. If a price floor of $12 is imposed, what is the resulting surplus? What is the cost to the government of purchasing any and all unsold units? Surplus: Cost to government: $[ c. Suppose demand is D and supply is so so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? Equilibrium price paid by consumers: $ Price received by producers: $ Number of units sold: [ so d. Calculate the level of consumer and producer surplus when demand and supply are given by D and SO respectively. Consumer surplus: $
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
Problem 25P
Related questions
Question
G.237.
Transcribed Image Text:Use the accompanying graph to answer these questions.
Price of X ($)
20
18-
units
16-
14-
12-
10H
00
6
2
2
3
units
ST
Quantity of Good X
80
a. Suppose demand is D and supply is SU. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price?
Shortage:
6
Full economic price: $
b. Suppose demand is D and supply is SO. If a price floor of $12 is imposed, what is the resulting surplus? What is the cost to the
government of purchasing any and all unsold units?
Surplus:
Cost to government: $
c. Suppose demand is D and supply is sº so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what
happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold?
Equilibrium price paid by consumers: $
Price received by producers: $
Number of units sold:
d. Calculate the level of consumer and producer surplus when demand and supply are given by D and so respectively.
Consumer surplus: $
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