--%>
Assignment Help - homework help

Equilibrium market price

In a perfectly competitive market, market demand curve is provided by Qd = 200 − 5Pd, and the market supply curve is provided by Qd = 35Ps.

a) Determine the equilibrium market price and quantity demanded and supplied in the lack of price controls.

b) Assume that a price ceiling of $2 per unit is imposed. Determine the quantity supplied with a price ceiling of this scale? Determine the size of the shortage made by the price ceiling?

c) Determine the consumer surplus and producer surplus in the lack of price ceiling. Determine the total economic benefit in the lack of price ceiling?

d) Determine the consumer surplus and producer surplus beneath price ceiling. Suppose that rationing of limited good is as proficient as possible. Determine the total economic benefit in this condition? Does the price ceiling outcome in a deadweight loss? If so, how much is it?

E

Expert

Verified

a) Pd = Ps = $5; Qd = Qs = 175 units.

b) Qs= 70 units.

c) The surplus implications of a price ceiling are illustrated below.

2384_1.jpg

1380_2.jpg

   Related Questions in Microeconomics

  • Q : Managerial economics and good business

    please find the attached file (project) and qoute for it. minimus 7 pages required.

    		•
  • Q : Technology used in price and supply Can

    Can someone help me in finding out the precise answer from the given options. The citizens in lower 48 states utilize lots of wild Alaskan salmon till a major oil spill close to Anchorage spoils the fishing. The ____ of salmon will increase whereas the ____ reduces. (

    		•
  • Q : Problem on organizing the business The

    The individual who wants to begin up a business, however who not want to risk in losing personal property if the business fails, must organizes the business as: (1) Sole proprietorship. (2) Partnership. (3) Corporation. (4) Unlimited partnership.

    Q : Family Allowance Plans for Payments

    Family Allowance Plans [FAPs] as like those common in many European nations give: (w) incentives for couples to live together without marriage due to the punitive tax rates. (x) payments that are roughly enough to feed and clothe each child in a famil

    		•
  • Q : Price elasticity of demand at

    At prevailing prices, there the price elasticity of demand for that good would be lowest: (w) Coca Cola. (x) Generic soda. (y) Water. (z) Dasani bottled water. Hey friends please give your opinion for the problem o

    		•
  • Q : Monopolistically competition A

    A monopolistically competitive firm: (w) confronts a perfectly elastic demand curve. (x) is a price taker. (y) faces stiff competition from many competitors producing close substitutes for its product. (z) consciously considers potential responses by

    		•
  • Q : Enter or leave the market by resources

    For a purely competitive industry in the long run: (i) several firms exit hence others may earn more than normal profits. (ii) established firms reap higher profits than newer firms. (iii) all resources are fixed for the industry as an entire. (iv) pe

    		•
  • Q : Relatively price inelastic for prices

    Suppose that all these illustrated curves are infinitely long straight lines. Then supply curve which is relatively (although not perfectly) price inelastic for all prices and quantities is: (1) supply curve S1. (2) supply curve S2

    		•
  • Q : Deter entry from potential competitors

    A firm along with important market power which builds an additional plant to increase excess capacity may be trying to as: (w) ignore a depletion of inventory. (x) deter entry from potential competitors. (y) increase demand and thus raise price and pr

    		•
  • Q : Shifting of left to right demand curve

    Shifting from left to right all along demand curve D, the price elasticity of demand for Pixie’s cheesy fried grits will be: (i) Positive, then unitary, and then negative. (ii) Constant and equivalent to one. (iii) More at high prices than at low prices. (iv) Lo

    		•