Consider a market in which the demand curve is given by P = 9 -0.1Qd, and the supply curve is given by P = 0.2Qs. Suppose the government imposes a price floor of 7 dollars. How much is producer surplus?100○ 4090070Crider a market in which he and by 1-41Selected Answer88Awers010070pics of how much is

Answered: Image /qna-images/answer/617c28f5-6d36-4b97-baf1-b585885ff69f.jpg

Answered: Consider a market in which the demand…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...

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Similar questions

What is producer surplus? How is it illustrated on a demand and supply diagram?
What is consumer surplus? How is it illustrated on a demand and supply diagram?
In a market where the supply curve is perfectly inelastic how does an excise tax affect the price paid by consumers and the quantity bought and sold?
The weekly supply and demand for cupcakes in a small town are given as OS = 30P- 20 and Q = 124 - 18P, where P is the price of a cupcake and Q is measured in thousands per %3D week. a. Find the equilibrjum price and quantity. b. Calculate the corsumer and producer surplus at the equilibrium price.
Suppose that the demand curve for wheat is Q500 - 10p and that the supply auve is O 10p What are the efects of a subnidy (negative tax) ofs4 per unit paid to produoers on the equlibrium, govemment. subsidy cost, consumer surplus (CS), producer surplus (PS), weifare (W, and deadweight loss (DWL)? Wih the subsidy, the equibrium price is Sand the equilibrium quantity isunits. (Enter your responses as whole numbers) The cost of the subsidy to the govermment is S (Enter your response as a whole number) The change in consumer surplus (ACS) is S (Enter your response as a whole number.) The change in producer surplus (APS) is S Enter your response as a whole number) The change in welttare (AW) is S (Enter your reaponse as a whole number and include a minus sign i necessary Deadweight loss is S (Ender your response as a whole number)
(a) Show the market for housing in equilibrium on a diagram, where demand is less elastic than supply, andlabel the respective consumer and producer surpluses. Discuss whether this market is Pareto efficient. (b) Assume that the State Government imposes a per-unit tax on the sellers of houses. A new diagram,shows the imposition of this tax on the market for housing. Does the imposition of this tax cause a Paretoimprovement to the market, explain? (c) Is the tax imposed in part (b) effective for the collection of Government revenue? Justify your answer withreference to your diagram in part (b).
•A market has the market supply equation as P = ½Q andthe demand equation as P = 6 ½Q, where P is price indollars and Q is the quantity.•••(a) Solve for the equilibrium price, the equilibrium quantity,the consumer surplus and the producer surplus in themarket. Support your answers with a suitable marketdiagram.•••(b) If there is a price ceiling of $2, compute the consumersurplus, producer surplus and the deadweight loss in themarket. Support your answers with a suitable marketdiagram.
Suppose that last year the equilibrium price and the quantity of good X were $10 and 5 million pounds. Because of strong demand this year, the equilibrium price and the quantity of good X are $12 and 7 million pounds, respectively. Assuming that the supply curve of good X is linear, what happened to producer surplus in the market? A B Producer surplus increased from $12.5 million to $49 million. Producer surplus increased from $12.5 million to $24.5 million. Producer surplus increased from $3 million to $7 million. Producer surplus increased from $4.2 million to $5.6 million. C D
What is producer surplus? How is it illustrated on a demand and supply diagram? Give an example of producer surplus.

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