Consumer-producer and total surplus at market equilibrium

Assignment Help Business Economics

Reference no: EM131104348

For this exercise you will need to first build a graph to these specifications: Draw a downward sloping demand curve with vertical intercept (0,150) and horizontal intercept (25,0). Draw a supply curve with vertical intercept (0,50) and with slope=4 i.e. the market equilibrium occurs at (10, 90).

Compute consumer, producer, and total surplus at the market equilibrium.

Label consumer surplus and producer surplus if the government imposes a price ceiling of $70, then compute deadweight loss.

Compute deadweight loss when the government imposes a price ceiling of $120.

Reference no: EM131104348

Questions Cloud

Confidence interval estimate of mean amount spent per day : A survey conducted by the American Automobile Association showed that a family of four spends an average of $215.60 per day while on vacation. Suppose a sample of 64 families of four vacationing at Niagara Falls resulted in a sample mean of $252.45 p..

What would be the value of the bond described : What would be the value of the bond described in part d if, just after it had been issued, the expected inflation rate rose by 3 percentage points, causing investors to require a 13 percent return? Would we now have a discount or a premium bond?

Tax reduction shifts the consumption schedule downward : If short-run equilibrium GDP is above potential GDP, prices will eventually rise. A tax reduction shifts the consumption schedule downward. A superior level of technology is an important reason the productivity of workers in rich countries is high. A..

Consumer surplus in the market for red wine : A drought in California destroys many grapes. As a result of the drought, what happens to the consumer surplus in the market for grapes and to the consumer surplus in the market for red wine? Draw the necessary graphs to represent this scenario and t..

Consumer-producer and total surplus at market equilibrium : For this exercise you will need to first build a graph to these specifications: Compute consumer, producer, and total surplus at the market equilibrium. Compute deadweight loss when the government imposes a price ceiling of $120.

Landmark global financial markets event : Explain why the November 1996 Deutsche Telekom issue was a landmark global financial markets event. Discuss: General reasons for privatization and DT’s reasons for it; why DT had to expand the offer outside Germany; why the issue was successful from ..

Calculate the learner index for this monopolist : What would be the monopolist price and quantity? Calculate the profit for the monopolist and the DWL . Calculate the learner index for this monopolist. Now assume that the government imposes a specific tax of $1 per unit. What will happen to price an..

Consider transaction between two market participants : Consider a transaction between two market participants. Suppose Wendy is a buyer who is willing to pay as much as $50 for a concert ticket. Suppose Bruce has a ticket and would like to receive $25 if he decides to sell it. Assuming the market price f..

Disposable income of rich people decrease as result : By how much did the disposable income of rich people decrease as a result of the 2012 hike in the top marginal tax rate from 35 to 39.6 percent? Assume they have $2 trillion of gross income in the highest bracket.

User Account

All Pages