Consumer and producer surplus for De Beers and the perfectly competitive price . Concept Introduction: Consumer surplus is the difference between the total price that consumers are able and willing to pay for a good and the price they actually end up paying. Producer surplus is the difference between the price the sellers receive for their good and the price at which they are willing to sell their good for.

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Answer 1

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Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 13, Problem 6P

To determine

Consumer and producer surplus for De Beers and the perfectly competitive price.

Concept Introduction:

Consumer surplus is the difference between the total price that consumers are able and willing to pay for a good and the price they actually end up paying.

Producer surplus is the difference between the price the sellers receive for their good and the price at which they are willing to sell their good for.

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Please answer questions D-H, I have already answered A , B,C but it may help you to still solve them yourself. Thank you!

2. A firm’s production function is given by:Q = 10KLThe unit capital and labour costs are 2 and 1 pounds respectively. The firm is contracted to produce2000 units.(a) Write out the optimisation problem of the firm. (b) Express this problem using a Lagrangian function. (c) Find values of K and L which fulfil the contract with minimal cost to the firm. (d) Calculate the total cost to the firm.

3. Consider the following estimated regression equation, estimated using a sample of firms, where RDis total firm spending on research and development in USD ($), Revenue is total firm revenuein USD ($), and W ages is the firms’ total spending on wages in USD ($) (standard errors inparentheses):RDd = 1000(600)+ 0.5(0.1)Revenue + 1.5(0.5)W ages,(a) Interpret the coefficients on each of the explanatory variables. (b) Which of the three coefficients are statistically significant at the 5% level of significance? Howdo you know? A researcher runs a two-sided statistical test of the null hypothesis that both the coefficients onthe explanatory variables above are jointly equal to 0.25 (mathematically, that β1 = β2 = 0.25),and reports a p-value of 0.045.(c) What does this p-value mean for the outcome of the test? (d) What would an appropriate two-sided alternative hypothesis look like?

Answer 2

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Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 13, Problem 6P

To determine

Consumer and producer surplus for De Beers and the perfectly competitive price.

Concept Introduction:

Consumer surplus is the difference between the total price that consumers are able and willing to pay for a good and the price they actually end up paying.

Producer surplus is the difference between the price the sellers receive for their good and the price at which they are willing to sell their good for.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 13, Problem 6P

To determine

Consumer and producer surplus for De Beers and the perfectly competitive price.

Concept Introduction:

Consumer surplus is the difference between the total price that consumers are able and willing to pay for a good and the price they actually end up paying.

Producer surplus is the difference between the price the sellers receive for their good and the price at which they are willing to sell their good for.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 13, Problem 6P

To determine