Microeconomics
2nd Edition
ISBN: 9781259813337
Author: KARLAN, Dean S., Morduch, Jonathan
Publisher: Mcgraw-hill Education,
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Question
Chapter 5, Problem 10RQ
To determine
Whether the total surplus is maximized at equilibrium even after an increase in price due to increase in
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Students have asked these similar questions
On the market for cherries, supply is inelastic, while demand is elastic. You know that suppliers are not ready to supply any cherries when the price is below $1.5 per pound.
a) On a graph, show the equilibrium price and the equilibrium quantity. Make sure you label the axes and the curves. Then, show the consumer surplus and the producer surplus.
b) Strawberries and cherries are substitutes. The price of strawberries increased. On a graph,show what will happen on the market for cherries. Show the change in the consumer surplus. Show the change in the producer surplus.
c) Forget about part (b). There are issues with the supply chain: transportation companies raise the fees they charge to deliver cherries from the farms to the supermarkets. On a graph, show what will happen on the market for cherries. Show the change in the consumer surplus. Show the change in the producer surplus
Sketch out (on scratch paper) or else imagine a market for pizza with a linear demand curve that starts at zero Q-demanded when P =$10 and then intersects
Supply at P = $8 Q = 100. Find the consumer surplus for that scenario. Just the $ amount but no $ sign.
Give typing answer with explanation and conclusion
If the price is temporarily below the equilibrium price in the market for grapefruit and it returns to equilibrium, the total surplus
will decrease.
will not change.
will increase.
may change, but we cannot determine the change without more information.
Chapter 5 Solutions
Microeconomics
Ch. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Prob. 4RQCh. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - Prob. 8RQCh. 5 - Prob. 9RQCh. 5 - Prob. 10RQ
Ch. 5 - Prob. 11RQCh. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14RQCh. 5 - Prob. 15RQCh. 5 - Prob. 16RQCh. 5 - Prob. 1PACh. 5 - Prob. 2PACh. 5 - Prob. 3PACh. 5 - Prob. 4PACh. 5 - Prob. 5PACh. 5 - Prob. 6PACh. 5 - Prob. 7PACh. 5 - Prob. 8PACh. 5 - Prob. 10PACh. 5 - Prob. 11PACh. 5 - Prob. 12PACh. 5 - Prob. 13PACh. 5 - Prob. 14PACh. 5 - Prob. 15PACh. 5 - Prob. 16PACh. 5 - Prob. 17PACh. 5 - Prob. 18PACh. 5 - Prob. 19PACh. 5 - Prob. 20PACh. 5 - Prob. 21PACh. 5 - Prob. 22PACh. 5 - Prob. 23PACh. 5 - Prob. 24PACh. 5 - Prob. 25PA
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- The table shows the demand and supply schedules for hamburgers. If the quantity demanded of hamburgers decreases by 40 per hour at each price, the new price of a hamburger is $ Total surplus by $arrow_forwardBased on the graph shown here, if the price of this good is $4.00 and the consumer purchases the optimal quantity, how much is consumer surplus? Price ($) $10.00 $6.00 $4.00 $2.00 10 20 30 Demand (MB) Quantity (units of the good)arrow_forwardIf a market is allowed to move freely to its equilibrium price and quantity, then a shift to the right of the supply curve will increase consumer surplus. Any of the above are possible. not affect consumer surplus. reduce consumer surplus. OOOOarrow_forward
- You are given the following market data for Venus automobiles in Saturnia. Demand: P = 35,000 - 0.5Q Supply: P = 8,000 + 0.25Q where P = Price and Q = Quantity. a. b. C. Calculate the equilibrium price and quantity. Calculate the consumer surplus in this market. Calculate the producer surplus in this market. Use the editor to format your answerarrow_forwardRegarding the conditions for the maximization of the total surplus, choose the correct words below. “The goods are produced by the producers with the (highest / lowest) costs. Raising or lowering the quantity of a good would not (decrease / increase) total surplus. The goods are consumed by the buyers who value them (least / most) highlyarrow_forwardOther things held constant, the greater the price of a good the greater the consumer surplus. the higher the quantity demanded. the lower the consumer surplus. the lower the quantity demanded.arrow_forward
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