Reference no: EM13896067
Assume that the state government is interested in subsidizing the local production of steel. The current price of steel is $1600 per ton and the government wants to provide a subsidy of $100 per ton. Assume that the elasticity of demand is 2, the short-run elasticity of supply is 2, and the long-run elasticity of supply is infinite. Furthermore, assume the equilibrium quantity exchanged (before the subsidy) is 3700 tons per month.
a. Use a diagram to indicate the pre-subsidy situation in this market. Label the price consumers pay PC0, the price producers receive PP0, the quantity supplied QP0, and the quantity demanded QC0.
b. In your diagram above, indicate the short-run post-subsidy situation in this market. Label the price consumers pay PC1, the price producers receive PP1, the quantity supplied QP1, and the quantity demanded QC1.
c. In your diagram above, indicate the long-run post-subsidy situation in this market. Label the price consumers pay PC2, the price producers receive PP2, the quantity supplied QP2, and the quantity demanded QC2.
d. Clearly indicate in your diagram above the total amount of subsidy the government will have to provide in the long-run. Calculate this amount (I want an exact number), showing all work.
|
Companies have the right to monitor all of the internet
: Should companies have the right to monitor all of the Internet "surfing" at work? How would you react if a company stipulated that no personal surfing is allowed and, if discovered, could result in termination? 200 words minimum
|
|
When does menu pricing dominate uniform pricing in monopoly
: When does menu pricing dominate uniform pricing in monopoly? Discuss the countervailing effects. Suppose a firm can target two groups of consumers by a menu of prices with different qualities.
|
|
What is the distortion effect of inflation
: Consider an investor with a 40 percent marginal tax rate. Suppose she holds an investment with a 10 percent real return. If inflation is 2.5 percent what is her after-tax real rate? What is the distortion effect of inflation?
|
|
Human resource policy class
: Human resource policy class.one essay based on best practices on innovations (or another topic related with human resource management) in human resources. no less than 3 pages and no more than 5 pages of length, double-spaced, and with APA style an..
|
|
Government is interested in subsidizing local production
: Assume that the state government is interested in subsidizing the local production of steel. The current price of steel is $1600 per ton and the government wants to provide a subsidy of $100 per ton. Use a diagram to indicate the pre-subsidy situatio..
|
|
How do markets work in which firms poach customers
: Does an increase in switching costs lead to more relaxed or more intense competition? Discuss. How do markets work in which firms poach customers?
|
|
Constructionist family therapy and narrative therapy
: Proponents of social constructionist family therapy and narrative therapy theorize that these forms of treatment are better suited to treating families that do not fit the two-parent "nuclear family" mold than are earlier theories such as structur..
|
|
What is the probability
: If 20% of the students entering college drop out before receiving their diplomas, ?nd the probability that out of 20 students picked at random from the very large number of students entering college, less than 3 drop out.
|
|
Some firms prosper by expanding during recessions
: Some firms prosper by expanding during recessions what are the risks that they take are there circumstances in particular industries under which a more cautious approach might be advisable
|