Consumer surplus-producer surplus-deadweight loss

Reference no: EM1367183

The market demand curve for a product is given as:

Q = 250 - 0.5P

a) Firm X1- Assume that the market is supplied by a monopolist with a constant unit cost equal to $100. Calculate the equilibrium price and quantity

b) Firm X2- Now assume that the market is supplied by perfectly competitive firms and that the market supply curve is perfectly elastic at a price equal to $100.

Compute the equilibrium price and quantity. Describe why the output and price levels are different for X1 and X2. Explain what occurs to consumer surplus, producer surplus, and deadweight loss.

Reference no: EM1367183

Questions Cloud

List of social problems : Make a list of 5-7 social problems that you beleive are the most critical for the United States to address. Write one or two sentences about each social problem, describing the extent of the problem.

Determine the benefits from the price increase : In the northeast US and in eastern Canada, many citizens heat their homes with heating oil. Suppose you are one of these people, and you are expecting a cold winter, so you are considering your heating oil requirements for the season.

Find out the mass ratio in terms of the variables : A pipe open only at one end has a fundamental frequency of 282Hz. A second pipe, initially identical to first pipe, is shortened by cutting off a portion of the open end.

Health care and human service : What merits or benefits has technology created in Health Care and Human Service? Has technology created any demerits or difficulties?

Consumer surplus-producer surplus-deadweight loss : Compute the equilibrium price and quantity. Describe why the output and price levels are different for X1 and X2. Explain what occurs to consumer surplus, producer surplus, and deadweight loss.

Write method that accepts as parameter reference : Write a method maxVal that accepts as parameter the reference to the head node of a linked list of integers. The method should return the largest value in the list.

Find out the heat required to melt all the ice : An unmarked police car travelling a constant 85 km/h is passed by a speeder travelling 145km/h. Precisely 1s after the speeder passes, police officer steps on the accelerator.

Computing price-income and advertising elasticity : A firm has estimated the following demand function for its product:

Forecast the unemployment rate : The price level in the economy in 2007 and 2008 rose from 100 to 105. In 2008 and 2009, the price level increase from 105 to 110.25. How does the short-run Phillips curve forecast the unemployment rate will change as a result?

User Account

All Pages