When economists say that market equilibrium is consistent with economic efficiency, they mean the total gains from trade (the combined area of producer and consumer surplus) are smaller than potentially could be the case at a different price and quantity. all units creating more benefit than cost have been produced. some units have been produced that cost more than the benefits they create. consumers and producers have made decisions without properly taking into account the market price.
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- Use the ideas of consumer surplus and producer surplus to explain why economists say competitive markets are efficient. Why are below- or above-equilibrium levels of output inefficient, according to these two sets of ideas?consider a market with typically shaped supply and demand curves. Suppose that at the market equilibrium, demand is relatively more price inelastic as compared to supply. Which of the following is true: 1. net social surplus all goes to suppliers 2. consumers' surplus is larger than producers' surplus 3. producers' surplus is larger than consumers' surplus 4. consumers' and producers' surplus are equalCalculate equilibrium price and quantity, consumer surplus, producer surplus, and total surplus using the integration method, given: Demand: P = 74 - Q2 Supply: P = Q2 + 4Q + 4
- In the rural area of a large agricultural-based economy in which corn is the staple food, there are many small farmers, each of them planting corns in a small piece of land using the same plantation method. Upon harvesting, they will deliver their corns to the city and sell them to the large population of customers in the city. The corn farmers do not have any bargaining power in determining the price of their corns. The corn price is determined by the market demand and supply, but each farmer will have no problem selling all their corns at the market equilibrium price. Q: There is no incentive for the corn farmers to carry out innovation in this corn market. Do you agree? Explain.In the rural area of a large agricultural-based economy in which corn is the staple food, there are many small farmers, each of them planting corns in a small piece of land using the same plantation method. Upon harvesting, they will deliver their corns to the city and sell them to the large population of customers in the city. The corn farmers do not have any bargaining power in determining the price of their corns. The corn price is determined by the market demand and supply, but each farmer will have no problem selling all their corns at the market equilibrium price. (a) Examine the market structure of the corn market. Draw a suitable corn market and also an individual farmer’s demand and supply diagrams to illustrate the initial situation in the corn market where all farmers are earning normal profit. Your diagrams should reflect the correct shape for the corn market demand and supply curves based on your understanding of the price elasticity of demand and supply of corns. (b) It…In the rural area of a large agricultural-based economy in which corn is the staple food, there are many small farmers, each of them planting corns in a small piece of land using the same plantation method. Upon harvesting, they will deliver their corns to the city and sell them to the large population of customers in the city. The corn farmers do not have any bargaining power in determining the price of their corns. The corn price is determined by the market demand and supply, but each farmer will have no problem selling all their corns at the market equilibrium price. It is discovered that consuming corn is beneficial to health. Appraise the short run and the long run effects on the corn market as well as the individual corn farmer following this discovery. (Your answer should not be more than 400 words).
- In the rural area of a large agricultural-based economy in which corn is the staple food, there are many small farmers, each of them planting corns in a small piece of land using the same plantation method. Upon harvesting, they will deliver their corns to the city and sell them to the large population of customers in the city. The corn farmers do not have any bargaining power in determining the price of their corns. The corn price is determined by the market demand and supply, but each farmer will have no problem selling all their corns at the market equilibrium price. There is no incentive for the corn farmers to carry out innovation in this corn market. Do you agree? Explain.In the rural area of a large agricultural-based economy in which corn is the staple food, there are many small farmers, each of them planting corns in a small piece of land using the same plantation method. Upon harvesting, they will deliver their corns to the city and sell them to the large population of customers in the city. The corn farmers do not have any bargaining power in determining the price of their corns. The corn price is determined by the market demand and supply, but each farmer will have no problem selling all their corns at the market equilibrium price. (a) Examine the market structure of the corn market. Draw a suitable corn market and also an individual farmer’s demand and supply diagrams to illustrate the initial situation in the corn market where all farmers are earning normal profit. Your diagrams should reflect the correct shape for the corn market demand and supply curves based on your understanding of the price elasticity of demand and supply of corns.In the rural area of a large agricultural-based economy in which corn is the staple food, there are many small farmers, each of them planting corns in a small piece of land using the same plantation method. Upon harvesting, they will deliver their corns to the city and sell them to the large population of customers in the city. The corn farmers do not have any bargaining power in determining the price of their corns. The corn price is determined by the market demand and supply, but each farmer will have no problem selling all their corns at the market equilibrium price. (a) Examine the market structure of the corn market. Draw a suitable corn market and also an individual farmer’s demand and supply diagrams to illustrate the initial situation in the corn market where all farmers are earning normal profit. Your diagrams should reflect the correct shape for the corn market demand and supply curves based on your understanding of the price elasticity of demand and supply of corns.(b) It is…
- In the rural area of a large agricultural-based economy in which corn is the staple food, there are many small farmers, each of them planting corns in a small piece of land using the same plantation method. Upon harvesting, they will deliver their corns to the city and sell them to the large population of customers in the city. The corn farmers do not have any bargaining power in determining the price of their corns. The corn price is determined by the market demand and supply, but each farmer will have no problem selling all their corns at the market equilibrium price. Q1) It is discovered that consuming corn is beneficial to health. Appraise the short run and the long run effects on the corn market as well as the individual corn farmer following this discovery. (Your answer should not be more than 400 words). Q2) There is no incentive for the corn farmers to carry out innovation in this corn market. Do you agree? Explain. (Your answer should not be more than 300 words).In the rural area of a large agricultural-based economy in which corn is the staple food, there are many small farmers, each of them planting corns in a small piece of land using the same plantation method. Upon harvesting, they will deliver their corns to the city and sell them to the large population of customers in the city. The corn farmers do not have any bargaining power in determining the price of their corns. The corn price is determined by the market demand and supply, but each farmer will have no problem selling all their corns at the market equilibrium price. It is discovered that consuming corn is beneficial to health. Appraise the short run and the long run effects on the corn market as well as the individual corn farmer following this discovery.In the rural area of a large agricultural-based economy in which corn is the staple food, there are many small farmers, each of them planting corns in a small piece of land using the same plantation method. Upon harvesting, they will deliver their corns to the city and sell them to the large population of customers in the city. The corn farmers do not have any bargaining power in determining the price of their corns. The corn price is determined by the market demand and supply, but each farmer will have no problem selling all their corns at the market equilibrium price. (a) Examine the market structure of the corn market. Draw a suitable corn market and also an individual farmer’s demand and supply diagrams to illustrate the initial situation in the corn market where all farmers are earning normal profit. Your diagrams should reflect the correct shape for the corn market demand and supply curves based on your understanding of the price elasticity of demand and supply of corns. (b) It…
