(b) Show that the equilibrium price (p*) and number of trips demanded (Q*) are givenby:p* =12090-C+T1800 100C - 20T90-C + T(c) The local government wants to reduce congestion on the airport road by loweringthe use of taxis to Q' < Q*. Suppose that a tax is imposed on petrol which raises Cfrom C = 10 to C = 15. Use diagrams to illustrate the impact of this tax on theprices and quantities in the market for taxis.(d) The local government could instead reduce congestion by creating licenses whichput a hard limit Qmax = Q' on the maximum number of daily trips to the airport.Is the amount of total surplus and deadweight loss created in the taxi marketdifferent to solution proposed in part (c)? Use diagrams to assist you in your answer.(e) Would increasing T by building a new railway line to the airport be a better way toachieve the government's goals? Evaluate the pros and cons of this solution relativeto creating a tax on petrol =23. The daily market demand for trips from the airport to the city by taxi is given by QD100 (T+60)p, where T≥ 0 is the number of trains from the airport to the city perday. The market supply of taxis is given by Qs = (30-C)p - 20 where C ≥ 0 is thecost of petrol (per litre).(a) What happens to the demand for taxi trips as we increase T? Provide someeconomic intuition for this effect.

"As per our policy, we can provide you with the solution of the first three subparts. Kindly raise…

(b) Show that the equilibrium price (p*) and number of trips demanded (Q*) are given by: p* Q* = 120 90-C+T 1800-100C - 20T 90-C+T (c) The local government wants to reduce congestion on the airport road by lowering the use of taxis to Q' < Q*. Suppose that a tax is imposed on petrol which raises C from C = 10 to C = 15. Use diagrams to illustrate the impact of this tax on the prices and quantities in the market for taxis.

(b) Show that the equilibrium price (p) and number of trips demanded (Q) are given by: p* Q* = 120 90-C+T 1800-100C - 20T 90-C+T (c) The local government wants to reduce congestion on the airport road by lowering the use of taxis to Q' < Q*. Suppose that a tax is imposed on petrol which raises C from C = 10 to C = 15. Use diagrams to illustrate the impact of this tax on the prices and quantities in the market for taxis.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Gasoline for cars is produced in a market. There are equations for the Supply and Inverse Demand of car gasoline that model its Supply and Demand graph. These equations are (for supply), P = 20 + Qs, and (for Inverse Demand), P = 80 - Qd. Due to gasoline shortages, some sellers may be able to get access to more gasoline and produce it better than others. As a result, the federal government placed a quantity restriction of 15 units on the sellers. (Part I) Draw the market equilibrium with the government intervention (Q** and P**) of the quantity restriction. Please label the graph for slopes, the equilibrium point, etc. (Part II) What is the market equilibrium without the intervention of the government? (Part III) The government decided that the previous quantity restriction was not sufficient. So, it increased the restriction from 15 units to 20 units. Consequently, what is the new market equilibrium point with this new intervention? It is not necessary to label this point on the…
The city of Rye has a large number of video arcades. The demand by patrons in thousands per week is Qd=200 - 2P and the supply is Qs= 2P where P is the price in cents charged to play a game. what is the Equilibrium number (quantity) of games played? What is the equilibrium price? draw a diagram showing the equilibrium in the marke
The weekly demand for wine in the United States is described by the following equation: Qd = 45,000,000 - 1,500,000P where Qd is the weekly quatity demanded in bottles and P is the price per bottle in dollars. The weekly supply of wine in the United States is described by the following equation: Qs = -5,000,000 + 1,000,000P where Qs is the weekly quantity supplied in bottles and P is the price per bottle in dollars. a. What is the equilibrium price and quantity for wine in the US? Intense lobbying efforts result in the United States government establishing a $5 per bottle excise tax by wine producers. b. What would be the new equilibirum price and quantity after the imposition of the per bottle excise tax? c. Determine the total amount of the consumer surplus assuming the market for wine is in equilibrium after the imposition of the excise tax.
Name a normal good, an inferior good, a set of substitute goods, a set of complements that are used in your household daily. For the normal good, make a (Hypothetical) linear demand schedule with 7 different price points and corresponding quantity demanded by your own household. For the same normal good, make another (Hypothetical) linear demand schedule with 7 different price points and corresponding quantity demanded by your neighbor. Assuming that you and your neighbor are the only two households in the market, make a market demand schedule for the same normal good. Draw and interpret a graph to show the market demand and impact of changes in quantity demanded if the price of the same normal good decreases. For the inferior good, draw and interpret a graph showing the demand curve and a shift in the curve if your income increases. For anyone good from the set of substitutes, draw and interpret a graph showing the demand curve and a shift in the curve if the price of the substitute…
S₁ S₂ XX D Quantity (per period) Panel A Panel C D₂ D₁ Quantity (per period) panel A panel B panel C panel D Panel B S₂ D Quantity (per period) Panel D S₁ S D₁ D₂ Quantity (per period) The figure shows how supply and demand for rental cars during the Thanksgiving holiday might shift in response to specific events. Suppose a late season hurricane in the Gulf of Mexico destroys gasoline refineries in Louisiana. Which panel best describes how this will affect the market for rental cars?
find the equilibrium price ratio and calculate the consumers’ demand for each of the two goods U1(x,y)=4x+2y, U2(x,y)=x+y Could you tell me why Px/Py<2, consumer will want x only? Px/Py<1 both consumers will only want x too ? Could you tell me how to find the price ratio to analysis want x only or want x,y?
What is a relevant example of how a change in the market (including information, preferences, technology, price of alternative goods, regulations, taxes, etc.) has shifted either the supply or demand of a good. How did this change affect the market equilibrium for that good or service? Explain. Next, find a relatively recent news article (within the past year) to support your finding (the news search feature in Google is helpful with this). If you cannot find an article specific to your example, you may find an article about another similar good or service. Talk about the article and its findings, then include the URL.
The demand for hamburgers is given by Qd=10-p and the supply is Qs=4p-10, where pd and ps are, respectively the price paid by demanders and the price received by suppliers. A: Draw the demand and supply functions. What is the price-elasticity of demand? What is the price-elasticity of supply? B: Find the equilibrium quantity and price, and show them on the graph. C: Suppose due to the rising health awareness the demand decreases to Q d=5-p. Find the new equilibrium prices and quantity, and show them on the graph. D: Suppose that the demand and supply are as before, i.e. Qd=10-p and Qs=4p-10, but now the government imposes a quantity tax on the suppler at the rate of 1 per unit of the quantity. What quantity will be sold and what price? E: In part d), what is the total amount of tax collected by the government? How this tax amount is divided between the demanders and supplier? Who pays more and why? Explain
Suppose that the market demand for Turkey is given by: Q_(T)=2-8P_(T)+2P_(C)+0.0015I Where Q_(T) is annual quantity demanded of turkey in million pounds, P_(T) is the price of turkey per pound, P_(C) is price of chicken per pound, and I is the average household income in dollars per year. a. Find the annual quantity demanded of turkey if the price turkey is $2.00 per pound, price of chicken is $1.50 per pound and the annual household income is $30,000.
What happens to the equilibrium price and quantity of a good (such as alcohol) if you prohibit its use and sale? Demonstrate using supply and demand graphical analysis.
Suppose that the market for bottled water can be represented by the following equations: Demand: P = 10 - 2QDSupply: P = 1 + 0.5QSwhere P is the price per gallon, and Q represents quantity of purified water, represented inmillions of gallons of water consumed.a) Calculate the equilibrium price and quantity of bottled water.b) Concerned over high water prices after the winter storm, the government sets a priceceiling of $2.25 per gallon of water. What is the new quantity of water sold in themarket? Use supply and demand curves to illustrate your answer, showing both theoriginal equilibrium from part a) and the new quantity sold with the price ceiling.c) Calculate the producer surplus and consumer surplus at the initial equilibrium priceand quantity from part a).d) Calculate the new producer surplus and consumer surplus with the price ceiling frompart b).e) How does the total consumer and producer surplus in part c) compare to the totalconsumer and producer surplus in part d)? What…
A particular commodity has a price-demand equation given by p = √18,444 - 417x, where x is the amount in pounds of the commodity demanded when the price is p dollars per pound. (a) Find consumers' surplus if the equilibrium quantity is 40 pounds. (Round your answer to the nearest cent if necessary.) (b) Find consumers' surplus if the equilibrium price is 17 dollars. (Round your answer to the nearest cent if necessary.) $