Suppose demand and supply are given by Qd = 60 - P and Qs = 1.0P - 20. a. What are the equilibrium quantity and price in this market? Equilibrium quantity: Equilibrium price: $ b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $52 is imposed in this market. Quantity demanded: Quantity supplied: Surplus: c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $36 is imposed in the market. Also, determine the full economic price paid by consumers. Quantity demanded: Quantity supplied: Shortage: Full economic price: $ Question 2: Consider a market where supply and demand are given by QXS = -14 + PX and QXd = 82 - 2PX. Suppose the government imposes a price floor of $37, and agrees to purchase and discard any and all units consumers do not buy at the floor price of $37 per unit. Instructions: Enter your responses rounded to the nearest penny (two decimal places). a. Determine the cost to the government of buying firms’ unsold units. $ b. Compute the lost social welfare (deadweight loss) that stems from the $37 price floor.
Question 1: Suppose
a. What are the
Equilibrium quantity:
b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a
Quantity demanded:
Quantity supplied:
Surplus:
c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a
Quantity demanded:
Quantity supplied:
Shortage:
Full economic price: $
Question 2:
Consider a market where
Instructions: Enter your responses rounded to the nearest penny (two decimal places).
a. Determine the cost to the government of buying firms’ unsold units.
$
b. Compute the lost social welfare (
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
