The graph below shows the supply and demand curves 13+ Demand 12 Supply 11 10 6. 7. - 6. 2 3.4 5, 6 7 8 9 10 11 12 13 Quantity of pizza rolls (8, What is the size of consumer surplus? 2 (3) Price of pizza rolls
The graph below shows the supply and demand curves 13+ Demand 12 Supply 11 10 6. 7. - 6. 2 3.4 5, 6 7 8 9 10 11 12 13 Quantity of pizza rolls (8, What is the size of consumer surplus? 2 (3) Price of pizza rolls
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
using the graph answer the following questions
8-9 listed on image
10. what is the size of social (total) surplus
Transcribed Image Text:**Price Floors and Market Surplus**
1. **Understanding Price Floors**
When a price floor is implemented, it sets a minimum price that must be paid for a good or service. For example, consider a scenario in which a price floor has been established for a certain commodity.
2. **Impacts on Market Supply and Demand**
**Question 6:** As a result of this price floor, is there a shortage or surplus, or is the price floor non-binding?
- If the price floor is set above the equilibrium price, it may lead to a surplus of goods or services. If it is set below or at the equilibrium price, it will be non-binding and have no effect on the market.
*Answer:* The price floor in this scenario is non-binding.
3. **Quantifying Shortage or Surplus**
**Question 7:** What is the amount of the shortage or surplus?
- To determine whether a shortage or surplus exists, and its magnitude, we need to compare the quantity supplied and the quantity demanded at the price floor.
*Answer:* Since the price floor is non-binding, there is no shortage or surplus.
**Supply and Demand Analysis for Pizza Rolls**
4. **Graph Analysis**
The provided graph illustrates supply and demand curves for pizza rolls. The x-axis represents the quantity of pizza rolls, while the y-axis represents the price of pizza rolls. The intersection of the supply and demand curves indicates the market equilibrium.
- The **demand curve** (downward sloping) represents the relationship between the price of pizza rolls and the quantity demanded by consumers.
- The **supply curve** (upward sloping) represents the relationship between the price of pizza rolls and the quantity supplied by producers.
- The point where these two curves intersect denotes the equilibrium price and quantity.
5. **Consumer Surplus Analysis**
**Question 8:** What is the size of the consumer surplus?
- Consumer surplus is calculated as the area between the demand curve and the price level, up to the quantity bought in the market.
*Answer:* The consumer surplus is 2 (3).
6. **Producer Surplus Analysis**
**Question 9:** What is the size of the producer surplus?
- Producer surplus is calculated as the area between the supply curve and the price level, up to the quantity sold in the market.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
Expert Answers to Latest Homework Questions
Q: Don't used Ai solution
Q: Financial Accounting
Q: General Accounting
Q: Figure: 06_P041
Copyright 2013 Pearson Education, publishing a Prentice Hall
2. Determine the force…
Q: What is the gain or loss of this financial accounting question?
Q: Get solution this financial accounting question not use chatgpt
Q: What are total assets of this financial accounting question?
Q: Need help with this general accounting question
Q: Calculate the gross profit ratio
Q: 4. A car travels in a straight line for one hour. Its velocity, v, in miles per hour at six minute…
Q: What Nova's net sale of the general accounting question?
Q: Compute the company's degree of operating leverage for this financial accounting question
Q: What is the predetermined overhead rate of this financial accounting question?
Q: Please need help with this general accounting question not use ai
Q: Financial Accounting
Q: How can we apply the categorical imperative to a contemporary ethical dilemma?
Give an example.
Does…
Q: Can you please solve this financial accounting problem?
Q: Please answer the financial accounting question
Q: What is the gross margin percentage of this financial accounting question?
Q: What is the machine's book value at the end of 2024 on this financial accounting question?
Q: Answer 4.4 pleas