BUS 100 - Project 2 - CoureHero

docx

School

University of British Columbia *

*We aren’t endorsed by this school

Course

100

Subject

Economics

Date

Feb 20, 2024

Type

docx

Pages

Uploaded by anthonyantillon

Project 2: Questions on Lessons 6-11 Question 1: a) $13 and 6 quantity b) $12 c) $15 d) $2 e) $1 f) 0.5*3*2= 3

Question 2: a) The equilibrium price and qty is found at a price of $30 and qty demanded/supplied at 7 million. This is the equilibrium because this is where the quantity demanded and quantity supplied curves intersect, showing the optimal price for buyers and the sellers. b) The new market price is $50, at this price point, 3M Recoins are demanded while 13M are supplied. This therefore causes a surplus of 10M Recoins (13M supplied – 3M demanded). c) The new market price is $20 – with 12M Recoins demanded and only 4M supplied. This would lead to a shortage of 8M Recoins. d) Because the equilibrium price is at $30, implementing a price ceiling at $40 will have no effect on the supply and demand as customers are paying the optimal price of $30. Suppliers would also find their optimum output at 7M

Question 3: a) # of Units at Q1 will be purchased b) A,B, and C c) # of Units at Q2 will be purchased d) A

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Question 4: a) When the cost of producing batteries decrease, there is a downward-right shift in the supply curve to reflect the change. This will then cause the price to decrease from P1 to P2, thereby also causing consumer surplus to increase. The equilibrium has also moved from P1,Q1 to P2,Q2 b) With the downward-right shift of the supply curve, the consumer surplus area increases from A to A+B+D. Meanwhile, because the price of batteries decreased and the supply curved shifted downwards, the producer surplus shrank and is now represented by C within the area of P2 and QS2. The total surplus area is comprised of A+B+C+D

c) If the QS curve was elastic, then the consumer would stand to benefit as the Consumer Surplus (CS) would be the area between QS and the QD line.

Question 5: a) It is a negative externality because the added traffic negatively affects the local community b) The graph below shows the private cost curve and its upward-right shift by $6 to represent both the private and added external cost to the community. c) The newly discovered externality of $2 would be considered a positive externality as it is an added benefit to the community

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

d) With the added inclusion of the $2 shift, we can see that the Qoptimum has shifted from Q1 to Q2, this is due to the fact that both the demand and supply curves have shifted to reflect the externalities from the art gallery

Question 6: a) If there were a sudden increase in demand in a perfect competition, we would see the demand curve shift to the right, similarly to the graph below and this would occur because the demand for wine has increased thereby causing the suppliers to maximize on this opportunity and increases prices, while also seeing an increase in demand from buyers. We can see the new market equilibrium at P2 and Q2. b) No the result will not last. We can see that initially there is no economic profit as the market is in equilibrium, however with the increase in demand + price increase, we see that firms begin to make economic profits, which would then entice new wine suppliers to enter the market, which would lead to new competition, thereby causing firms to lower prices again.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Question 7: a) Price and quantity is shown below at P1 b) The total surplus is in Areas A,B

c) The total profit would be A,B, and C. Because they can tailor their pricing to meet different demand groups, any area highlighted below the demand curve and above the MC curve would be considered profit. d) As mentioned in C, the profit from price discrimination moves from just A to A,B,C. This is because the company can now tailor its pricing to capture all the demand for their services. This leads to the deadweight loss (area C) and the surplus area (b) to now be captured as profit.

Related Documents

ECON325 Portfolio Project Template Week 5.docx

Final_Exam_22X-pt_1.pdf

ac 03.pdf

1421103_Agarwal_Mayank_Eco.docx

CAFTADR Quiz.docx

Screenshot (15).png

BUS 100 - Project 1 - CourseHero.docx

econ paper.pdf

solutions02.pdf

APznzaZ0VYbZToW2gJ-V8bmHJTZ3jOJqHwgRzOjk1O2FUCgDJxupzMKEUUFPCbK1506v-33GwqVPM7J1RQZ23rg9QiU0UV13JpUZ

enbus410 stakeholder engagement .pdf

week 1 Disc Labor Relation.docx

Recommended textbooks for you

Survey of Economics (MindTap Course List)

Economics

ISBN:9781305260948

Author:Irvin B. Tucker

Publisher:Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Cengage Learning

Exploring Economics

Economics

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:SAGE Publications, Inc

MACROECONOMICS FOR TODAY

Economics

ISBN:9781337613057

Author:Tucker

Publisher:CENGAGE L

Micro Economics For Today

Economics

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Cengage,

Microeconomics: Principles & Policy

Economics

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:Cengage Learning

SEE MORE TEXTBOOKS

Recommended textbooks for you

Survey of Economics (MindTap Course List)
Economics
ISBN:9781305260948
Author:Irvin B. Tucker
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
MACROECONOMICS FOR TODAY
Economics
ISBN:9781337613057
Author:Tucker
Publisher:CENGAGE L
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning