Price $150 200 250 300 350 400 450 500 550 600 650 1. Equilibrium price $350 2. Quantity 50 Quantity Demanded 100 90 NO 70 500 7. Remove the tax. Imposes a price floor $100 below the equilibrium price a Equilibrium price $350 and quantity? 50 60 50 3. Consumer Surplus? 6250 4. Producer Surplus? 6250 5. What is the total surplus? 12500 6. Suppose a $200 unit tax is placed on the good being sold. How much tax revenue is to be made? 4000 b. Resulting amount of surplovshortage if any (0 if no 0 8. Remove the price floor Impose a price ceiling $50 below the equilibrium price aEquilibrium price $350 and quantity? 50 40 30 20 10 0 Quantity Supplied 10 20 30 40 50 60 70 NO 90 100 How much deadweight loss is created (0 if none)?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Price
$150
200
250
300
350
400
450
500
550
600
650
1. Equilibrium price $350
2. Quantity 50
3. Consumer Surplus? 6250
4. Producer Surplus? 6250
500
7. Remove the tax. Imposes a price floor $100 below the equilibrium price
a Fiquilibrium price $350
and quantity? 50
Quantity Demanded
100
90
5. What is the total surplus? 12500
6. Suppose a $200 unit tax is placed on the good being sold. How much tax revenue is to be made? 4000
b. Resulting amount of surplus/shortage if any (0 if none) 0
8. Remove the price floor Impose a price ceiling $50 below the equilibrium price
a Equilibrium price $350
and quantity? 50
b. Resulting amount of surplus/shortage (0 if none) o
80
70
60
50
40
30
20
10
0
Quantity Supplied
10
20
30
40
50
60
70
80
90
100
.
How much deadweight loss is created (0 if none)?
Transcribed Image Text:Price $150 200 250 300 350 400 450 500 550 600 650 1. Equilibrium price $350 2. Quantity 50 3. Consumer Surplus? 6250 4. Producer Surplus? 6250 500 7. Remove the tax. Imposes a price floor $100 below the equilibrium price a Fiquilibrium price $350 and quantity? 50 Quantity Demanded 100 90 5. What is the total surplus? 12500 6. Suppose a $200 unit tax is placed on the good being sold. How much tax revenue is to be made? 4000 b. Resulting amount of surplus/shortage if any (0 if none) 0 8. Remove the price floor Impose a price ceiling $50 below the equilibrium price a Equilibrium price $350 and quantity? 50 b. Resulting amount of surplus/shortage (0 if none) o 80 70 60 50 40 30 20 10 0 Quantity Supplied 10 20 30 40 50 60 70 80 90 100 . How much deadweight loss is created (0 if none)?
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