15) Complete the table below by calculating consumer surplus, producer surplus, and total surplus for various market conditions: a) Calculate these "surpluses" at market equilibrium; b) Calculate these "surpluses" when a quota of four units (Q= 4) is imposed by government; c) Calculate these "surpluses" when a price floor of $9 is imposed by government; and d) Calculate these "surpluses" when a price ceiling of $4 is imposed by government. Calculate the deadweight loss for any of the four market conditions. Supply & Demand Diagram #2 12 11 10 9 8 7 6 5 4 3 2 1 0 0 1 2 3 4 5 6 7 8 9 10 11 12 Market Condition Price Quantity Quantity Demanded Supplied Quantity Consumer Producer Traded Surplus Surplus Total Surplus Deadweight Loss a) Equilibrium b) Quota, Q=4 4 4 4 c) Price floor, P = $9 P $9 d) Price ceiling, $4 P = $4 CONCLUSION: Identify the market condition under which total surplus is maximized. Explain.

15) Complete the table below by calculating consumer surplus, producer surplus, and total surplus for various market conditions: a) Calculate these "surpluses" at market equilibrium; b) Calculate these "surpluses" when a quota of four units (Q= 4) is imposed by government; c) Calculate these "surpluses" when a price floor of $9 is imposed by government; and d) Calculate these "surpluses" when a price ceiling of $4 is imposed by government. Calculate the deadweight loss for any of the four market conditions. Supply & Demand Diagram #2 12 11 10 9 8 7 6 5 4 3 2 1 0 0 1 2 3 4 5 6 7 8 9 10 11 12 Market Condition Price Quantity Quantity Demanded Supplied Quantity Consumer Producer Traded Surplus Surplus Total Surplus Deadweight Loss a) Equilibrium b) Quota, Q=4 4 4 4 c) Price floor, P = $9 P $9 d) Price ceiling, $4 P = $4 CONCLUSION: Identify the market condition under which total surplus is maximized. Explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

15) Complete the table below by
calculating consumer surplus,
producer surplus, and total
surplus for various market
conditions:
12
12
11
10
9
80
7
6
5
4
a) Calculate these "surpluses" at
market equilibrium;
b) Calculate these "surpluses" when
a quota of four units (Q= 4) is
imposed by government;
c) Calculate these "surpluses" when
a price floor of $9 is imposed by
government; and
d) Calculate these "surpluses" when
a price ceiling of $4 is imposed by
government.
Calculate the deadweight loss for any of
the four market conditions.
Supply & Demand Diagram #2
3
2
1
0
0
1
2
3
4
5
6
7
8
9
10
10
11 12
Market Condition
Price
Quantity Quantity
Demanded Supplied
Quantity
Traded
Consumer Producer
Surplus Surplus
Total
Surplus
Deadweight
Loss
a) Equilibrium
b)
Quota, Q=4
c) Price floor, P
$9
= $9
d)
Price ceiling,
$4
P = $4
4
4
4
CONCLUSION: Identify the market condition under which total surplus is
maximized. Explain.

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Step 1: Define consumer surplus and producer surplus

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Step 3: Calculate the Surpluses with quota

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Step 4: Calculate the Surpluses with price floor

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Step 5: Calculate the Surpluses with price ceiling

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