The demand and supply curves in the market

Assignment Help Business Economics

Reference no: EM13978582

The demand and supply curves in the market for college education determine the equilibrium price and quantity of education. Assume the student for college education is given by Dstu = P = 9500 – 500Q and the cost to society to of providing a college education or the social supply curve is given by Ssoc = P = 3500 + 1000Q; where P is the price of tuition per year and Q is the average number of years of college attendance. (a) Assuming the market for education is private, what is the equilibrium price of tuition and equilibrium quantity of education consumed? Solve numerically and show in a diagram. (b) Suppose that each year of college provides external benefits equal to $4500. The social demand would be Dsoc = 14,000 – 500Q. What is the socially optimum average number of years of college? What tuition must be charged to supply that quantity? Solve numerically then show in the same diagram as in (a). (c) What dollar amount of subsidy will lead to social optimum? Solve numerically then show in the same diagram as in (a)?

Reference no: EM13978582

Questions Cloud

Show graphically the labor input decisions : Show graphically the labor input decisions of the following situations:

Find equilibrium price and quantity solving two equations : Find the equilibrium price and quantity solving the two equations. Show graphically the demand and supply curve and mark the equilibrium wage on the graph (no graph no points). Suppose the government imposes s minimum wage of $5.50 per hour. What is ..

Testing whether vehicle-ownership distribution in community : In a study of vehicle ownership, it has been found that 31% of U.S. households do not own a vehicle, with 48% owning 1 vehicle, and the remaining owning 2 or more vehicles. When testing (at the 10% level of significance) whether the vehicle-ownership..

Calculate what percentage of payroll tax will pay : Assume that Robert is willing to work for 40 hours per week no matter what is the wage rate, so his labor supply curve is vertical at 40 hours. The demand curve for Robert is given by the equation: What is Robert’s equilibrium wage rate and hours wor..

The demand and supply curves in the market : The demand and supply curves in the market for college education determine the equilibrium price and quantity of education. Assume the student for college education is given by Dstu = P = 9500 – 500Q and the cost to society to of providing a college ..

Difficult due to complex technological innovations : If the study of carpentry becomes more difficult due to complex technological innovations and usage of sophisticated tools, the marginal benefit of achievement will decline. Generally rising expenditure per student are associated with increase in edu..

Variable costs by operating in the short run : If a firm is able to cover its variable costs by operating in the short run then, at its best output level, the______.

What might the likely effect be for the world economy : What might the likely effect be for the world economy and particularly the United States economy if prices of all goods from China increased? How might this affect your disposable income?

Compute consumer surplus when verizon wireless charges : Suppose that Verizon Wireless has hired you as a consultant to determine what price it should set for calling services. Suppose that an individual's inverse demand for wireless services in the greater Boston area is estimated to be P = 100 − 33Q and ..

User Account

All Pages