Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 5P
To determine
The connection between total surplus and efficient level of output with the help of demand and supply curves.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
tab
STUDY NOTES
The value of x at equilibrium is.
The value of p at equilibrium is $
Find the consumers' surplus and the producers' surplus at the equlibrium level for the given
price-demand and price-supply equations. Include a graph that identifies the consumers'
surplus and the producers' surplus. Round all values to the nearest integer.
p=D(x)=39-0.09x; p= S(x)=11+0.05x
!
1
0
The consumers' surplus at equilibrium is $.
December 5, 2022 at 6:46 AM
A
The producers' surplus at equilibrium is $.
2
W
S
Aa
#
3
E
D
$
4
R
F
8
%
5
T
» Q
G
6
F
Y
2048 tv
&
7
H
O
8
(C
Determine the output level creates a maximum total surplus.
If the deadweight loss in the market represented by the graph is $1,400, what is the actual economic surplus?
Knowledge Booster
Similar questions
- In a market, the consumer surplus is 800,000 units and the producer surplus is 100,000. Which of the following statement is true? Group of answer choices The market is efficient since marginal benefit is equal to marginal cost. The market is inefficient since consumer surplus is greater than producer surplus and marginal benefit is equal to marginal cost. The market is efficient since consumer gain more than the producer. The market is inefficient since consumer surplus is greater than producer surplus.arrow_forwardSolve a Consumers' or Producers' Surplus Problem. A sports watch has a price-demand equation given by P D(z) 95-2 0.21171z = dollars, which gives the price per watch when x watches are demanded. The price-supply equation for the watch is given by p=S(x)=0.7x+5 dollars, which gives the price per watch when watches are supplied. If the equilibrium quantity is 13, find the consumers' surplus and the producers' surplus. The consumers' surplus is (Your answer must begin with $.) The producers' surplus is (Your answer must begin with S.)arrow_forwardThe market demand and supply equations for theme park in a city are given by P = 30 – 0.005QD and P = 10 + 0.005QS, where P is the price in dollars and QD is the quantity of theme-park tickets demanded and QS is the quantity of theme park ticket supplied. Given that the equilibrium price of theme park tickets is $20, equilibrium quantity of theme park tickets is 2000 and the consumer surplus is 10000 and producer surplus is 10000: Explain the implications of the welfare of consumers, producers and the society when the price of theme park ticket is fixed at $15. Support your answers with a graph of the theme park tickets market.arrow_forward
- Solve a Consumers' or Producers' Surplus Problem. A sports watch has a price-demand equation given by p= D(z) = 40-2-0174176a dollars, which gives the price per watch when a watches are demanded. The price-supply equation for the watch is given by p= S(x) = 0.6z+4 dollars, which gives the price per watch when z watches are supplied. If the equilibrium quantity is 11, find the consumers' surplus and the producers' surplus. The consumers' surplus is. (Your answer must begin with S.) The producers' surplus is Your answer must begin with $.)arrow_forwardAssume the market for headbands is characterized by a downward sloping demand curve and an upward sloping supply curve. Suppose there is an improvement in technology for producing headbands. Which of the following would occur? A C E The total surplus (sum of producer and consumer surplus) would increase B The change in equilibrium price would cause total producer surplus to increase D The impact on total consumer surplus would be indeterminate, because of the offsetting impact of the changes in equilibrium price and quantity The supply curve would shift up, resulting in an increase in the equilibrium quantity and total producer surplus The demand curve would shift right in response to an increase in equilibrium price https://bcps.schoology.com/common-assessment-print/course/6305214264/6083116066?multipleQuestions=1&includeAnswerkey=1&includeBlank 10/33arrow_forwardA Market is most efficient whenarrow_forward
- Define Consumer and Producer Surplus and illustrate them graphically.arrow_forwardDon't use pen or paper Suppose market demand and supply are characterized by the following equations: p = 12 - 0.4 Qd p = 2 + 0.4 Qs When the market clears, what is the economic surplus? (Round your answer to one decimal place.)arrow_forwardSuppose that the market for cigarettes is initially in equilibrium and is perfectly competitive. The demand curve can be expressed as P = 60 - Qd; the supply curve can be expressed as P = 0.5Qs. Quantity is expressed in millions of boxes per month. Now suppose that the federal government imposes a production quota on cigarettes of 30 million boxes per month. What is the change in producer surplus (per million boxes) associated with the quota? $175 $75 $25 $50arrow_forward
- For each scenario, decide whether it results in a producer or consumer surplus. Then calculate the resulting surplus. Alice is willing to spend $30$30 on a pair of jeans and has a coupon for $10$10 off. She purchases a pair of jeans that costs $35$35 pre-discount. Alice receives a Alice's surplus: $ Jeff finds steak in the supermarket priced at$16$16 but that he would have been willing to pay $20$20 for. The butcher notices the meat is near the expiration date and gives him an extra 7575% off. Jeff receives a producer surplus. consumer surplus. Jeff's surplus: $ Nicole has a hockey puck from the 2018 Winter Olympic Games and puts it up for sale on eBay. She will only sell the puck if the winning bid is greater than or equal to $500$500. After the bidding closes, the last bid stands at $501$501. Nicole receives a Nicole's surplus: $arrow_forwardConsider a regional with a uniform distribution of population where every household consumes the same amount of a good. The regional government recently stated its policy for the location of factories making the good: “A factory should reach the minimum point of its average production cost curve at an output of 1000 units. Since the total demand for the good is 4000 units, we should have 4 factories in the region. Since the distribution of the population is uniform, the factories should be distributed uniformly throughout the region” Comment on this policy as to in particular whether there should be more or fewer factories for efficiency?arrow_forwardD(x) is the price, in dollars per unit, that consumers are willing to pay for x units of an item, and S(x) is the price, in dollars per unit, that producers are willing to accept for x units. Find (a) the equilibrium point, (b) the consumer surplus at the equilibrium point, and (c) the producer surplus at the equilibrium point. D(x) = 5 - x, for 0sxs5; S(x) = Vx+ 1 (a) What are the coordinates of the equilibrium point? (Type an ordered pair.)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc