What is the deadweight loss of the price ceiling

Assignment Help Econometrics

Reference no: EM13192334

The market for college hockey players is characterized by the following supply and demand curves, where Q is the number of athletes and P is the weekly wage in excess of their scholarship payments:
QD = 1600 - 20P, QS = -900 + 30P
(a) Suppose there is a completely free market. What is the equilibrium weekly wage? How many athletes are hired?
(b) Now suppose that the National Collegiate Athletic Association (NCAA) steps in and decides to crack down on payments to players. The NCAA is bothered not by the existence of these payments, but by their levels, so the NCAA restricts players to be paid no more than $35/week above the scholarship payment. How many athletes are now hired?
(c) What is the change in producer surplus (i.e. the players' surplus) as a result of the price control?
(d) How much do schools now spend on players in comparison to the free market equilibrium?
(e) What is the deadweight loss of the price ceiling?

Reference no: EM13192334

Questions Cloud

How us economy will experience higher labor productivity : The bulk of the spurt can be traced to the boom in investment information technology capital and to the growth in the information technology-producing part of the economy. Measurement issues abound and having better data would help resolve them.

Determine what is minimum salvage value : A new chemical remediation tank is needed. Current technology tanks, which costs $150,000, MUST BE DRAINED AND TREATED EVERY TWO YEARS AT A COST OF $30,000; THE TANKS WILL LAST TEN YEARS, AND EACH WILL HAVE A SALVAGE VALUE OF 5%. OF FIRST COST.

State manic-depressive illness was analyzed for lithium : Serum taken from a patient being treated with lithium for manic-depressive illness was analyzed for lithium concentration. A reading of 332 units was obtained for the intensity of the 671 nm red emission line.

Compute the threshold wavelength : Calculate the threshold wavelength, in nm, of a metal if that metal emits an electron with a kinetic energy of 6.36E-19 J when illuminated with light that has a frequency of 1.97E15 Hz.

What is the deadweight loss of the price ceiling : The market for college hockey players is characterized by the following supply and demand curves, where Q is the number of athletes and P is the weekly wage in excess of their scholarship payments QD = 1600 - 20P, QS = -900 + 30P

Compute the mass of mgco3 precipitated by mixing : calculate the mass of MgCO3 precipitated by mixing 10.0 mL of a 0.200 M Na2CO3 solution with 5.0 mL of a 0.0450 M Mg(NO3)2

What is highest price that a vendor would pay for a permit : Consider a city that has a number of hot dog stands operating throughout the downtown area. Suppose that each vendor has a marginal cost of $1.50 per hot dog sold and no fixed cost. Suppose the maximum number of hot dogs that any one vendor can se..

What is the total distance it travels : a ball falls from the height ofd 15 feet, each time it hits the ground it bounces up 60%of the height it fall. Assume it goes on forever, what is the total distance it travels.

State mole of aluminum metal react with a mole of solid iron : three mole of aluminum metal react with a mole of solid iron(iii) oxide to produce two moles iron metal and a mole of solid aluminum oxide

User Account

All Pages