When supply goes down, the equilibrium price goes up. This is because if there is a smaller supply the good becomes more valuable to people who want the good.
Answer: 16 units more than social optimum.
DWL = dead weight loss = (1/2)*(Q* - Q°) 12 =96
Explanation:
Q=1200 - 4P and Q=-240 + 2P
In a free market quantity demand =quantity supplied
1200 -4P = -240 +2P
P =240
Sub P
Q* = 240
Socially optimal quantity is
Marginal social benefit (MSC)= marginal social cost(MSC), including external damage =MEC
MPC= marginal private cost =inverse of supply function
MPC = (1/2)*Q + 120
MEC=12
MSC =(MPC +MEC) = (1/2)Q +120 +12
MSC= MPB where MPB is marginal private benefit = inverse of demand functn
MPB = 300 -(1/4)Q
(1/2)Q + 132 =300 - (1/4)Q
Q° = 224
Difference btw Q* & Q° = 16 units more than social optimum.
DWL = dead weight loss = (1/2)*(Q* - Q°) 12 =96
Answer:
The correct answer is letter "B": magnitude of the response in quantity demanded to a change in price.
Explanation:
Price elasticity of demand is the measure of how quantity demanded for a good or service changes as a result of changes in price. <em>Price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price</em>. If the result is equal or greater than one (1) the good or service is elastic. If the result is lower than one (1), the product is inelastic.
Answer:
$10,200,000.
Explanation:
End inventory + Sales - Begin inventory = # of units that need to be produced
# of units that need to be produced @ $30 per = Your answer
Answer:
producer surplus
consumer surplus
neither
Explanation:
Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.
Consumer surplus = willingness to pay – price of the good
The highest amount i was willing to buy the watch is $71 but the price was $65. this illustrates a consumer surplus
Producer surplus is the difference between the price of a good and the least price the seller is willing to sell the product
Producer surplus = price – least price the seller is willing to accept
The least amount the textbook seller was willing to sell was $48 while the price the textbook was sold was $54. thus, a illustrates a producer surplus.
for statement c, a transaction did not take place, so, it is neither a producer or consumer surplus
