Explain why a city that has a low price elasticity of supply in the housing market, like Detroit, might be more likely to have problems with government corruption.
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- 1. Recall the regulation model where legislators apply regulations to garner votes. Votes are a function of producer utility (UR ) and consumer utility (UC ). The legislator’s vote/utility function is V = V(UR , UC ). If U R = R, and U C = K – R – L, where K is a constant and R and L are the typical monopoly versus competitive market outcome below. Obviously, both U R and U C are affected by the eventual price (P) set by the legislator because both R and L are affected by that price. (a) Now suppose the demand equation is given by P = 100 - Q , and MC = $20. Write R as a function of the price and show that the price that maximizes producer utility is $60. (b) Given the MC and demand equation above, find the maximum possible consumer surplus (hint: this will be when the market is competitive). (c) Now suppose that (in addition to the information in parts d and e), the legislator gets votes according to V (U R, U C ) = 3U R + U C . Find the price that maximizes the legislator’s votes.9. A state-owned power company monopolize electricity supply. Its daily variable cost of increasing electricity generation is $8 per unit. It has a constant return on output size over time and its daily marginal cost of electricity generation is $7 per unit. If the daily peak demand Q1 and off-peak demand Q2 in the market are: Q1 = 100 - 2P^(1/2), Q2 = 50 - 5P^(1/3) where P is the unit price. The peak time is 6 hours, and the off-peak time is 18 hours. What is the optimal generation capacity of the power company during peak time (Q1)? O a) 64.00 O b) 72.00 O c) 80.00 O d) 88.00 → TheDoyle and Samphantharak (2008) find that when a 5% gas tax is implemented, prices consumers pay for gas increase by about 4%. What role does demand elasticity play in determining the size of this price change? That is, under what demand elasticity cases would the price change be closer to 5%, or closer to 0%? Illustrate and explain using supply-and-demand graph(s)..
- 11) Recall the application about the demand and supply of human organs and the role of government in this market. If the government was to relax its restraints on private parties selling and buying human organs, we should expect to see: A) prices of the organs rise. B) Prices of the organs to remain constant. C) Prices of the organs to decrease. D) less availability of organs. 12) Recall the application about the demand and supply of human organs and the role of government in this market. Since the quantity demanded is currently greater than the quantity supplied, it can be determined that the government price is: A) at equilibrium. B) greater than equilibrium. C) less than equilibrium. D) determined by supply and demand. Additional Application Prior to 2001 Canada annually exported billions of board feet of lumber to the USA tariff-free. The two countries had followed an agreement in which there would be no restrictions on the lumber from Canadian companies.…Question: You have the following information from the market Demand function: QD=270-5P Supply function: QS=-70+5P Submit answers in two decimal places if you get answers in decimals/fractions 1.What is the economic cost of the sellers? 2.Government has imposed a tax regulation of 5 taka. Assume that buyers and sellers both share the tax burden equally. 3.What is the consumer surplus after tax? 4.What is the producer surplus after tax? 5.What is the tax revenue?question 1 a b and c
- 2a. Graphic and describe the market for Spam. 2b. Graph and describe what happens in this market when people's incomes fall. (Include this in the graph for 2a).Answer this question for me mate. Much appreciated. :)1. Suppose the government is considering a ban on smoking in restaurants in Tobaccoville. There are 1 million residents in Tobaccoville, and each resident would benefit by $200 from the smoking ban. However, there are two large tobacco companies in Tobaccoville, and the ban would cost each company $5 million. What are the proposed policy's total costs and total benefits? Why would the proposed smoking ban likely fail? 2. To ensure safety and efficacy, the Food and Drug Administration regulates the medicines that pharmacies are allowed to sell in the US. Sometimes this means that a company must test a drug for years before receiving FDA approval and reaching the market. We can easily identify the "winners" in this system as those who are protected from unsafe drugs that might otherwise harm them. Who are the more "anonymous losers" who suffer due to the strict FDA medical regulations?
- 5. Indicate whether each of the following statements is true or false, and explain your answer.A. If a monoplist is producing a level of output at which demand is inelastic, the firm is not maximizing profits and increasing output will decrease total revenu.B. When a monopolist maximizes profits, the price is greater than the marginal cost of producing the output. This means that consumers are willing to pay more for additional units of the product than these additional units of the produce. Thus, the monopolist should produce and sell addional units of output.C.A monopolistically competitive firm produces a level of output at which price equals $80, marginal revenue equals $40, average total cost equals $100, marginal cost equals $40 , and average fixed cost equals $10. To maximize profit, the firm should produce a smaller output and sell it at a higher price.D. In a monopolistically competitive market, a firm has market power because it produces a differentiated product. This means…3. In 200 words or more. 1) Do you think that business interests should have such a profound effect on Texas government and politics? Why or why not? 2) Also, if you were to start in interest group in Texas, on what issue would you focus and how would you attract members and influence policy-makers?I don't why you keep saying this is a writing assignment and rejecting my question this is a question that my economics professor gave to me. Any other time i put up a question like this you always answer it. What's the difference between this and all those other questions. Just answer the problem how hard can it be. I couldnt care less if you answered the question with one sentence just please answer it.
