Determine the cost to the government of buying firms

Reference no: EM13181426

Consider a market where supply and demand are given Qx^s=-10 +Px
and Qx^d= 56-2Px. Suppose the government imposes a price floor of $25, and agrees to purchase any and all units concumers do not buy at the floor price of $235 per unit.

a. Determine the cost to the government of buying firms' unsold units.
b. Compute the lost social welfare (deadweight loss) that stems from the $25 price floor.

Reference no: EM13181426

Questions Cloud

Describes a thioester and reduced cofactor : Determine whether each of the phrases or examples describes a thioester, reduced cofactor, or phosphorylated compound:

State the synthesis of aspirin from methyl salicylate : Durning the synthesis of Aspirin from Methyl salicylate we perfom a recrystallization. How do I relate the % yield of each compound to the efficacy of the recrystallization technique?

Describe maximization of income : If the price of blue toy cars is $5 and the price of pink toy cars is $2, then which of the following consumers will make the same choices if their income is the same (assuming maximization of income) Gloria, utility is U(b,p) = b^2 * p

Balanced equation for the synthesis of acetylsalic acid : What is the balanced equation for the synthesis of Acetylsalic acid (Aspirin) from Methyl salicylate?

Determine the cost to the government of buying firms : Consider a market where supply and demand are given Qx^s=-10 +Px and Qx^d= 56-2Px. Suppose the government imposes a price floor of $25, and agrees to purchase any and all units concumers do not buy at the floor price of $235 per unit. a. Determine..

How many configurations of occupied : Probability question. A doctor's office has 4 examination rooms. At any given time, each room can either be occupied or empty. How many configurations of occupied and empty examination rooms are possible?

Find the equation of the line : If the price is raised to $110 you predict that you can sell 25 of these premium toasters at your Scottsdale, Arizona location. Find the equation of the line and you can write your answer in the following form: p = mx + b.

State how many grams and pounds of washing soda : How many grams and pounds of washing soda are needed to remove the hardness from 500 gallons of water that has a hardness of 150 ppm CaCO3?

How many cartons were left over : Juan's first-grade class received 91 half-pint cartons of milk to distribute evenly to his 26 students. How many cartons were left over?

User Account

All Pages