What is the change in their consumer surplus

Assignment Help Business Economics
Reference no: EM132368910

Consider the market for parking spaces in a campus. Suppose there are two types of demanders: faculty (F) and students (S). The faculty's inverse demand curve for parking spots is: p = 300 - 5qF . Students' inverse demand for parking is p = 300 - 15qS where p is the price of a parking space, qF is the quantity of parking spaces purchased by faculty and qS is the quantity purchased by students.

(a) Convert the faculty and students' inverse demand curves into "standard demand" curves that state the quantity of spaces demanded by each group at any given price.

(b) If we define faculty and students the total market for parking places, what is the market demand for parking on campus? Plot the faculty's demand, students' demand, and the market demand curve. (Hint: it may be easier to use inverse demand when you are ready to plot the curves).

(c) Suppose that the price of a parking spot for a day is initially p0 = $15. How many spaces do faculty and students each demand? What is the faculty's consumer surplus?

(d) Due to increased maintenance costs, the price is raised to p1 = $20. Now how many spaces do the faculty demand? What is the change in their consumer surplus?

Reference no: EM132368910

Questions Cloud

Build an appropriate mesh for the model : Advanced Flow Modelling - Calculate the drag and lift coefficient for Build an appropriate mesh for the model - Chart the axial velocity profiles
Bond with a shorter date : Why does a bond with a longer maturity date have a greater interest rate risk than a bond with a shorter date?
Create the guess the number game course project : Create the Guess the Number game course project. In addition, add some new feature to your Guess the number game. Smarter computer guessing.
Why did you select phd in information technology : Why did you select PhD in Information Technology?Why did you select University of Cumberlands?What are your research interests in area of Information Technology
What is the change in their consumer surplus : Now how many spaces do the faculty demand? What is the change in their consumer surplus?
Significant portion of mexico avocado production : Suppose that there is a hurricane that wipes out a significant portion of Mexico's avocado production. As a result, the price of avocado toast in San Francisco
Practical manner to your current work environment : how the knowledge, skills, or theories of this course have been applied, or could be applied, in a practical manner to your current work environment.
Design a program for group orders : Ask the group to enter number of people who want admission only but no 3D show, number of people who want 3D show only but no admission.
Potential drawbacks of creating separate products : What are two potential drawbacks of creating separate products and marketing programs for each generation?

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd