Microeconomics
2nd Edition
ISBN: 9781259813337
Author: KARLAN, Dean S., Morduch, Jonathan
Publisher: Mcgraw-hill Education,
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Question
Chapter 5, Problem 5PA
To determine
To represent the consumer surplus on the graph and calculate the value of consumer surplus.
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9
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Question
The demand curve for a product is given by QD
= 475 - 25P and the supply curve for a product
is given by QS = 15P - 45
%3D
a) Illustrate the demand curve and the supply
curve on the same graph. Label both axes.
b) Calculate both the equilibrium price and
quantity.
c) Calculate the consumer surplus and the
producer surplus.
d) Identify consumer surplus and producer
surplus on your graph. Label as CS and PS.
e) Find the total willingness to pay for the
equilibrium quantity and the total variable cost
of supplying the equilibrium quantity. Identify
these areas on your graph.
please show work
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 consumer surplus for John is $10 and his maximum willingness to pay for the product is $30 What would have been the market price?arrow_forwardQuestion 3 Suppose the demand for a product is given by Q-100-5P, where Qp is quantity per year measured in kilogram and P is the price in AUD per kilogram. The supply curve for this product is given by Qs=4P-8. Answer the following questions and provide a graph illustration. a) Determine the equilibrium price? b) Calculate the elasticity of demand and supply at the equilibrium price. c) Determine the consumer surplus and producer surplus at the equilibrium price? d) Suppose that the government imposes a floor price of A$15 and promises to buy any surplus (e.g., Q³- QD) on the market. Determine the new consumer surplus, the new producer surplus, and the government expenditure of this policy e) Instead of using the floor price, now the government imposes a A$3 tax on each kg sold, determine the market price after having this tax policy. f) Calculate the consumer surplus, producer surplus and tax revenue. g) Using the concepts of demand and supply elasticity, predict which party, the…arrow_forwardQuestion 39 You are considering buying a monthly metro pass for the subway at $100 or paying $4 per ride (Pd). Your monthly demand curve is Pd = 60-2Qd where Qd is the number of rides per month. Given this information, your consumer surplus will be $784 buying each ride and $800 with the monthly pass. $600 buying each ride and $700 with the monthly pass. $784 buying each ride and $750 with the monthly pass. $750 buying each ride and $900 with the monthly pass.arrow_forward
- The graph represents the market for artichokes (in pounds per week) at a Midwest farmers' market. Suppose the equilibrium price of artichokes is $3 per pound and the equilibrium quantity is 100 pounds of artichokes per week. Using the graph, show the area representing consumer surplus in this market, and then determine how much consumer surplus will be generated by the market each week. Instructions: Use the tool provided 'CS' to illustrate this area on the graph. Consumer surplus: ? $ Please show me how to represent consumer surplus in the graph and how to find the consumer surplus. Please explain it. Thank you.arrow_forwardof 20) - Google Chrome om/mod/quiz/attempt.php?attempt3D1472585&cmid3D718317&page=1 ystem (AcademIt) 百 30 25 20 on 15 10 5 D = MSB 2 4 6 8 10 12 Quantity (CDs per year) The figure above shows Clara's demand for CDs. At a price of $20 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is Select one: O a. $40. O b. $4. Oc. $30. Od $20. e here to search hp Price (dollars per CD) 立arrow_forwardPQ 8.05 Your local music venue has a capacity of 70 people. Suppose the venue decreases the price of a ticket from $20, at which 50 tickets are sold, to $15, and it sells 70 tickets. The price decrease caused an increase in total consumer surplus of $ this scenario out before trying to calculate). -- (Hint: draw Type your numeric answer and submitarrow_forward
- please helparrow_forwardMegan buys an iPhone for $240 and gets a consumer surplus of $160. Her willingness to pay for an iPhone is s If she had bought the iPhone on sale for $180, her consumer surplus would have been s If the price of the iPhone had been $500, her consumer surplus would have been sarrow_forwardOnly typed answerarrow_forward
- Price ($) 15 14 13 12 11 10 9 S 8 D 7654321 0 10 20 30 40 50 60 70 80 90 Quantity Assume the market depicted in the graph is in equilibrium. What is total surplus?arrow_forward4. Consumer surplus for an individual and a market The following graph shows Teresa's weekly demand for cheesecake, represented by the blue line. Point A represents a point along her weekly demand curve. The market price of cheesecake is $3.00 per slice, as shown by the horizontal black line. Teresa's Weekly Demand 7.50 6.75 6.00 5.25 Demand 4,50 3.75 Price 3.00 2.25 1.50 0.75 4. 6. 8. 10 12 14 16 18 20 QUANTITY (Slices of cheesecake) PRICE (Dollars per slice)arrow_forwardNeha buys an iPhone for $240 and gets a consumer surplus of $160. Her willingness to pay for an iPhone is . If she had bought the iPhone on sale for $180, her consumer surplus would have been . If the price of the iPhone had been $500, her consumer surplus would have beenarrow_forward
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