Consider the following market. Now, suppose that the government imposes the price ceiling at price of $100. Answer the following questions based on the information. Calculate the change in consumer surplus. Change means final value minus initial value. 250 Price 200 150 100 50 0 (30, 130) Quantity Change in consumer surplus: 400 Change in consumer surplus: 0 60 80

Consider the following market. Now, suppose that the government imposes the price ceiling at price of $100. Answer the following questions based on the information. Calculate the change in consumer surplus. Change means final value minus initial value. 250 Price 200 150 100 50 0 (30, 130) Quantity Change in consumer surplus: 400 Change in consumer surplus: 0 60 80

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter4: Prices: Free, Controlled, And Relative

Section: Chapter Questions

Problem 4WNG

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Refer to the figure entitled "Market for Meds". If a price ceiling is imposed at $4, what will be the change in consumer surplus? Price (in $) 10 8 2 0 0 10 Market for Meds 20 30 Quantity 40 So Do 50 1) Consumer surplus will fall by 2.5. 2) Consumer surplus will increase by 2.5. 3) Consumer surplus will decrease by 17.5. 4) Consumer surplus will increase by 17.5. 5) None of the above. 60
Comsumer Surplus Study The goal of this assignment is to apply Calculus to analyze consumer and producer surplus. This activity is based off the economical principles discussed in Section 3.1 of "Principle of Economics" and Section 7 of Chapter 3 in the Business Calculus book. The table below shows how supply and demand of gasoliine vary depending on the price: Price ($/gal) Demand (million of gal.) Supply (million of gal.) 753 513 550 1.2 700 1.4 640 600 1.6 580 639 1.8 543 660 2.2 450 680 2.4 430 700 2.6 420 720 2.8 390 735 3. 367 763 Note: there is some randomization in the above data to account for price fluctuations. Make sure to check that you input the correct data in your device. Perform the following work • Assume that Supply has a quadratic relationship with the price. Find this relationship (the help buttons contain an article to compute trend-lines in Excel): S(p) = Round your answer to 3 decimal places %3D • Assume that the Demand has a quadratic relationship with the…
Price(per pound) Quantity Supplied(pounds) Quantity Demanded(pounds) $7 80 30 $6 70 45 $5 60 60 $4 50 75 $3 40 90 $2 30 105 $1 20 120 The equilibrium price is $ per pound. Suppose that after a successful lobbying campaign by chocolate producers, the government imposes a price floor of $7 per pound. The price floor will lead to a surplus of pounds of chocolate. After a few years, chocolate producers are not happy. They realize that compared to the market equilibrium, their total revenue has fallen by $ . To compensate the chocolate producers, the government agrees to buy the entire surplus chocolate at the $7 price floor. Chocolate producers rejoice. Compared to the market equilibrium, their total revenue has now increased by $ .
Analyze the effect of a price ceiling in the market for wheat on equilibrium price and quantity. Will consumers / producers /both benefit because of this price ceiling? Explain using changes in consumer and producer surpluses.
The demand and supply schedule for coffee are: Price ($ per cup) Quantity Demanded Quantity Supplied $1 130 10 $2 110 20 $3 90 30 $4 70 40 $5 50 50 $6 30 60 $7 10 70 $8 0 80 a) If there is no tax on coffee, what is the price and how much coffee is consumed b) What is the consumer surplus? Show your calculations c) What is the price elasticity of demand when the price goes up from $3 to $4 dollars? Is the demand for coffee elastic or inelastic? Explain.
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12 . Problems and Applications Q10 A market is described by the following supply and demand curves: QSQS = = 3P3P QDQD = = 400−P400−P The equilibrium price is and the equilibrium quantity is . Suppose the government imposes a price ceiling of $80. This price ceiling is , and the market price will be . The quantity supplied will be , and the quantity demanded will be . Therefore, a price ceiling of $80 will result in . Suppose the government imposes a price floor of $80. This price floor is , and the market price will be . The quantity supplied will be and the quantity demanded will be . Therefore, a price floor of $80 will result in . Instead of a price control, the government levies a tax on producers of $40. As a result, the new supply curve is: QSQS = = 3(P−40)3P−40 With this tax, the market price will be , the quantity supplied will be , and the quantity demanded will be . The passage…
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. Which statement best explains how a price ceiling affects the market for gasoline? It can cause more gasoline producers to enter the market. It can lead to producers increasing their production costs for gasoline. It can cause shortages in the supply of gasoline. It can lead to a decrease in the demand from consumers for gasoline.
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A). Draw the supply and demand curves for the market of specific good. B). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the government imposes a price ceiling of $3 what happens? Draw the new graph explaining how quantities are affected by that decision. C). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the government imposes a price floor of $5 what happens? Draw the new graph explaining how quantities are affected by that decision.