Suppose the government imposes a price floor of $28 in this market. If the sellers with the lowest cost are the ones who sell th
e good and the government does not purchase any excess units produced, then total surplus will be
1 answer:
Answer:
$1120
Explanation:
The chart of the question is in the below image.
Consumer surplus is the area above the price line and below the demand curve whereas producer surplus is the area below the price line and above the supply curve. These areas can be calculated by using the formula of area of a triangle which is
If the government imposed a price floor of $28 then the consumer surplus will be:
A = (1/2)×$40×($48 -$28)
A = $400
The producer surplus = ($28 -$20)×$40 + (1/2)×($20-$0)×($40 -$0)
The producer surplus = $8× $40 + $400 = $320+$400 = $720
Total surplus can be calculated as:
Total Surplus = Consumer surplus + Producer Surplus
Total Surplus = $400 + $720 = $1120
Total Surplus is $1120
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Answer:
Actual Price paid for materials = $4.2136 2,200 = $9,270
Actual price per unit = $4.2136
Explanation:
Provided information,
Standard Material per unit = $4
Total cost = $8,400
Standard Quantity = $8,400/$4 = 2,100 units
Provided Material Price variance = $470 unfavorable = - $470
Material Quantity Variance = $400 Unfavorable = - $400
Using Material Quantity Variance
- $400 = (2,100 - Actual Quantity) $4
-$400/$4 = 2,100 - Actual Quantity
Actual Quantity = 2,100 + 100 = 2,200 units
Now, putting this value in Material Price Variance we have,
- $470 = ($4 - Actual Price) 2,200
-$470/2,200 = $4 - Actual Price
- $0.214 = $4 - Actual Price
Actual Price = $4 + $0.2136 = $4.2136
Final Answer
Actual Price paid for materials = $4.2136 2,200 = $9,270
Actual price per unit = $4.2136