The demand curve for a bottle of wine in SLO is givenby PD = 56 -0.6Q D and the supply curve is given byPS = 8 +0.2Q S . a) What is the dollar value ofconsumer surplus at the equilibrium? b) What is thedollar value of producer surplus at the equilibrium? c) Ifa $4 tax is imposed on wine sellers, what will be theresulting price paid by buyers and the resulting pricepaid by sellers? What share of the tax burden will fall onwine consumers? d) What is the dollar value of thedeadweight loss from this tax?

The objective of the question is to find the equilibrium price and quantity, calculate the consumer…

Answered: The demand curve for a bottle of wine…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P,e Qs = 2P. a) Find the current equilibrium price and quantity. b) What is the total producer surplus if the market is in equilibrium? - The government is considering a minimum price policy to increase producer surplus.- c) Explain by means of graphs how the introduction of a price floor can increase producer surplus. d) Find the (optimal) price floor that maximizes producer surplus.
QUESTION 7 Price P₂ 0 N M B SMC Demand Quantity a₂ a₁₂ Refer to the graph above. What area) represents the producer surplus at the market solution (lemake? QUESTION 8 Price SMC PMC D E S Y: N A L M Amount of Electricity Refer to the graph above. What area(s) represent(s) the producer surplus (firm's profits) at the market solution (Le.market equilibrium)? U PMC Demand
Consider a competitive market with demand equal to Q=1,200-10P and supply equal to Q=2OP. a. What is the value of consumer surplus, producer surplus, and total surplus at equilibrium? b. Suppose the government introduces a price ceiling of P=$25. What impact does this have on consumer surplus, producer surplus, and total surplus relative to the competitive equilibrium outcome?
1. Suppose the market demand is described as P = 15 - Qd: , while the market supply function is: P = 3 + Qs/11. Suppose the current market is at equilibrium. What is the producer surplus? (Hint: You need to calculate market equilibrium price and equilibrium quantity.) 11 8 6. 5.5 What is the total surplus? 44 60.5 66 72.5
The local weather treatment facility, a price taker, is able to supply the first gallon of water for $0.01. The second for $0.02. The third for $0.03 and so on. The current price of water is $0.06 per gallon. - choose each of the following that are correct a. Producer surplus will rise if the market price increases to $0.07 per gallon b. This water treatment facility will choose to produce seven gallons of water c. The firm will enjoy higher producer surplus if it unilaterally raises prices d. This water treatment facility will earn $0.15 in producer surplus
Find the consumer surplus, producer surplus and total surplus, given the following: Demand: ? = −?^2 − 8? + 70Supply: ? = ?^2 − 2? + 14
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 the equations below represent the market supply and demand for cellular service. QD = 50 – 0.25P QS = 2P – 76 a. Graph the supply and demand curves, and label the equilibrium quantity and price. b. Calculate the amount of Consumer Surplus and Producer Surplus in this market. c. Suppose the government enacts a per-unit tax of $9 for each unit sold. Illustrate the effect of this tax in your graph of the market for cellular service, and calculate the new market price and quantity sold. d. Calculate the amount of deadweight loss associated with this per-unit tax. e. Calculate the share of the tax burden that the sellers bear. f. Briefly explain why there is a relationship between the slopes of the supply and demand curves, and the tax burden on each side of the market.
For years the government has subsidized higher education through grants; consider the demand and supply for college credit hours at a local private liberal arts collegeQD = 6,000 – 300PQS = 700P – 500 where P is the price, in hundreds of dollars, and Q is the number of credit hours per semester. Suppose the government subsidizes credit hours at a rate of $120 per hour. Calculate changes in consumer surplus. What is the size of the deadweight loss?
Consider a market where demand and supply satisfy the following equationsQd = 12 – 2 P,QS = 2P.a)Find the current equilibrium price and quantity. b)What is the total producer surplus if the market is in equilibrium? The government is considering a minimum price policy to increase producer surplus.c)Explain by means of graphs how the introduction of a price floor can increase producer surplus. d)Find the (optimal) price floor that maximizes producer surplus. hi, can you answer part c and part d for this question please, thanks

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