Calculate the consumer and producer surplus

Assignment Help Microeconomics

Reference no: EM133279178

Question - Suppose the market for apartments can be described by the following supply and demand curves:

Qs = -20 + 10P

QD = 4000 - 20P

Required -

a) Find the equilibrium price and quantity. Illustrate on a graph.

b) Calculate the consumer and producer surplus.

c) Suppose that the city rent control laws establish a price ceiling of $100/month - no rent may be charged above $100. How many apartments will be rented out? What is the new consumer surplus? The new producer surplus? What is the deadweight loss of the rent control policy?

Reference no: EM133279178

Questions Cloud

What is the budget constraint graph in this scenario : Jimmy has $100 and he decides to spend all of his money on buying shirts and shoes. What is the budget constraint graph in this scenario

How many video games will you sell in each market : If you can ensure that video games sold in Berkeley are not resold in Palo Alto and vice versa, how many video games will you sell in each market

What is your opinion about post-breakup relationships : What's your opinion about post-breakup relationships? Can former romantic partners still have some kind of relationships? Should they

Who has absolute advantage in setting traps : Who has Absolute Advantage in setting traps? Explain in 1-2 sentences. Who has Absolute Advantage in building sandcastles? Explain in 1-2 sentences

Calculate the consumer and producer surplus : Suppose the market for apartments can be described by the following supply and demand curves: Calculate the consumer and producer surplus

Draw a circular-flow diagram : Draw a circular-flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the flow of dollars for each

Draw the short-term supply curve of the au bon café firm : Draw the short-term supply curve of the Au bon café firm. Your chart should be accurate. Indicate at least two points on your curve

How much consumer surplus does sean receive : The store sells the drinks for $1.75 and has a 'buy two get a third one free' offer. How much consumer surplus does Sean receive

Do you agree or disagree with this statement : Buyers always prefer lower prices to higher prices. Do you agree or disagree with this statement? Explain your answer

User Account

All Pages