Suppose the market demand for ethanol isQD=60-10Pand market supply of ethanol isQS =20+10PIf the government institutes a price ceiling of $1.20, what is the effect on economic efficiency?The price ceiling will create deadweight loss of $(Enter your response rounded to two decimal places.)

Let's solve this step by step.Given:Demand equation: QD = 60 - 10P Supply equation: QS = 20 +…

Answered: Suppose the market demand for ethanol…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the market demand for ethanol is Q=60-5P and market supply of ethanol is Q=20+15P If the government institutes a price ceiling of $1.80, what is the effect on economic efficiency? The price ceiling will create deadweight loss of $ (Enter your response rounded to two decimal places)
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In 1996, Florida voted on (and rejected) a $0.01-per pound excise tax on refined cane sugar in the Florida Everglades Agricultural Area. Swinton and Thomas (2001) used linear supply and demand curves (based on elasticities estimated by Marks, 1993) to calculate the incidence from this tax given that the market is competitive. Their inverse demand curve was p=1.787 -0.0004641Q, and their inverse supply curve was -0.4896 + 0.00020165Q. p=- (Hint: The incidence that falls on consumers is the difference between the price with and without the tax divided by the tax.) Calculate the incidence of the tax that falls on consumers for a competitive market. The incidence that falls on consumers in a competitive market is 70.0 percent. (round your answer to one decimal place) If producers joined together to form a monopoly, and the supply curve is actually the monopoly's marginal cost curve, what is the incidence of the tax? The incidence that falls on consumers is percent. (round your answer to…
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Suppose the market demand for ethanol is QD=60-10P and market supply of ethanol is QS =20+10P If the government institutes a price ceiling of $1.20, what is the effect on economic efficiency? The price ceiling will create deadweight loss of $ (Enter your response rounded to two decimal places.)