What is consumer surplus under the quota

Reference no: EM13223180

Consider a perfectly competitive market where market demand is given by Qd=30-P and market supply is given by Qs=2P. In this market, the government has imposed a production quota of 10.

a)What is consumer surplus under the quota?
b) Assuming the units are produced by the most efficient producers, what is the producer surplus under the quota?
c) Assuming the units are produced by the most efficient producers, what is the deadweight loss associated with this production quota?
d) Now assume instead that the units are produced by the least efficient producers. What is the producer surplus in this case?

Reference no: EM13223180

Questions Cloud

What is the full definition of imports and exports : what is the full definition of imports and exports tell me all about international trade and domestic trade. what are the advantages and disadvantages of imports and exports of goods what are the problems of exports and importsof goods

How did the spotlight program improve the use of feedback : How did the spotlight program improve the use of feedback?

How does a current budget deficit affect future workers : 1. How does a current budget deficit affect future workers How could a policy by the current government to reduce the national debt hurt these future workers 2. Monetary and fiscal policies are said to have "lags." What are lags and why do they exi..

Problem - supply chain coordination : How many units of the product should the retailer order to maximize its expected profit? What is the associated retailer's expected profit and the supplier's expected profit?

What is consumer surplus under the quota : Consider a perfectly competitive market where market demand is given by Qd=30-P and market supply is given by Qs=2P. In this market, the government has imposed a production quota of 10.

Describe what prices will be charged for a movie : A movie theater has estimated that the demand for a movie ticket can be written as P1 = 10 - Q1 for senior citizens and P2 = 12 - Q2 for the rest of the customers. The marginal cost of a movie ticket is $1. If the movie theater practices third-deg..

Explain the refrigerant carbon tetrafluoride : Carbonyl fluoride, COF2 , is an important intermediate used in the production of fluorine-containing compounds. For instance, it is used to make the refrigerant carbon tetrafluoride

What is the marginal cost curve for each firm : The chair-making industry currently consists of 90 producers, all of whom operate with the identical short-run total cost curve STC(Q)=500+3Q2, where Q is the annual output of a firm. Only $200 of each firm's fixed cost is sunk. The market demand cur..

How many units of black sweaters should be ordered : How many units of black sweaters should be ordered to maximize expected profit? What is the associated expected profit - how many red, black, and uncolored sweaters should be ordered to maximize expected profit? What is the associated expected pro..

User Account

All Pages