Background: guided discussion You begin your presentation to the Mayor with some background on the efficiency of the market for hotel rooms in Las Vegas. You estimate that the supply and demand for hotel rooms are described by the following equations: Supply : Q' = 4P – 80 Demand : Q = 100 – 2P (a.) Graph the supply curve and the demand curve. What is the equilibrium price and quantity? (b.) Calculate (and label in the graph) consumer surplus, producer surplus, and total surplus at the equi- librium. (c.) If the Mayor decided to ban all hotel rooms in Las Vegas, who wold bear the larger burden – the buyers or sellers of broccoli?

Background: guided discussion You begin your presentation to the Mayor with some background on the efficiency of the market for hotel rooms in Las Vegas. You estimate that the supply and demand for hotel rooms are described by the following equations: Supply : Q' = 4P – 80 Demand : Q = 100 – 2P (a.) Graph the supply curve and the demand curve. What is the equilibrium price and quantity? (b.) Calculate (and label in the graph) consumer surplus, producer surplus, and total surplus at the equi- librium. (c.) If the Mayor decided to ban all hotel rooms in Las Vegas, who wold bear the larger burden – the buyers or sellers of broccoli?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 14CTQ: The rules of politics are not always the same as the rules of economics. In discussions of setting...

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