Consider the market for milk in Saskatchewan. If p is the price of milk (cents per litre) and Q is the quantity of milk (millions of litres per month), suppose that demand and supply curves for milk are givenby the following.Demand:Supply:p=240-25Qºp=10+25Qa. Assuming there is no government intervention in this market, what is the equilibrium price and quantity?The equilibrium quantity is 4.6 millions of litres. (Round your response to one decimal place.) The price is 125 cents per litre. (Round your response to the nearest cent.) The monthly revenue for milkproducers without government intervention is $ 5.8 million(s) of dollars. (Round your response to one decimal place.)b. Now suppose the government guarantees milk producers a price of $2.25 per litre (that is, 225 cents per litre) and promises to buy any amount of milk that the producers cannot sell. What is thequantity demanded and the quantity supplied at this guaranteed price?The quantity demanded at the guaranteed price is ☐ million(s) of litres. (Round your response to one decimal place.)

Explanation of SolutionPart (a)Identify Demand and Supply Equations:Demand: p=240−25QDSupply:…

Answered: Consider the market for milk in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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18-19. In the competitive market for white sugar, consumer demand is given by P=100-0.050 and suppliers' behaviour is represented by the supply curve of P=1+0.005Q, where P is measured in dollars and Q is measured in kilos per month. Questions 17 through 19 refer to this market. 18. Imagine now that the government imposes a price ceiling of $5.00 per kilo on sugar, and that the ceiling is obeyed by all market participants. In the resulting equilibrium the total number of kilos of sugar exchanged in the market is equal to: A) 2100 G) 800 B) 2000 H) 600 A) $5 G) $70 C) 1900 I) 400 B) $10 H) $80 19. Suppose suppliers obey the price ceiling but consumers sell sugar on a black market. What will the black market price for sugar be? D) 1400 E) 1200 J) None of the above C) $10.50 I) $21 E) $50 F) 1000 D) $40 J) None of the above F) $60
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Suppose that the demand and supply curves for green peas are given by QD = 10 – 8P and QS = 2P, where P is the price per pound and Q is measured in thousands of pounds. If the price per pound of peas is $0.50, the market _____, so the price will _____. has excess demand of 3,000 pounds; rise has excess supply of 1,000 pounds; fall is in equilibrium; remain unchanged has excess demand of 5,000 pounds; rise
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Price (dollars per pound) $21 18 15 13 11 0 40 $200 $100 $800 $60 80 Supply Demand Quantity (pounds) Figure 4-4 shows the market for tiger shrimp. The market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose producers decide to cut output to 40 in order to raise the price to $18. What is the value of deadweight loss when the quantity is cut and the price rises to $18?
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