If the government imposes a price floor of $120 in this market, what is the dead weight loss? If the government imposed price floor of $120, is removed and the price returns to equilibrium. What are the gains in consumer surplus by the current consumers and the new consumers

If the government imposes a price floor of $120 in this market, what is the dead weight loss? If the government imposed price floor of $120, is removed and the price returns to equilibrium. What are the gains in consumer surplus by the current consumers and the new consumers

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...

See similar textbooks

Related questions

Q: market for N-95 masks is perfectly competitive. Market Demand is given by Q=434-2P and Market Supply…

Q: Suppose the equilibrium for the market of staplers has a price of $49 , at which 136 staplers are…

A: Price floor is the minimum price that must be paid to sellers. It is imposed to protect producers…

Q: Suppose the government imposes a $10 per unit tax on a good with a demand and a supply depicted in…

A: Consumer surplus is the area above the market price and below the demand curve. Producer surplus is…

Q: rice (per pound) Quantity Supplied (pounds) Quantity Demanded (pounds) $7 80 30 $6 70 45 $5 60 60 $4…

A: Given Price ($ per pound) Quantity supplied (pounds) Quantity demanded (pounds) 7 80 30 6…

Q: Market demand for Mandrake roots is given by Q=356-5P and market supply is given by Q=4P. The…

A: An effective price Ceiling is set above the equilibrium level. Consumer surplus is the area above…

Q: Question 21 - part 2 Given the following information 2D 240-5P where QD is the quantity demanded, QS…

A: Answer to the question is as follows :

Q: b) calculate the consumer surplus before tax. c) calculate the producer surplus before tax. d) For…

A: Consumer surplus and producer surplus refers to the welfare received by the consumers and producers…

Q: (i) Find the equilibrium price and quantity. (ii) After parents complained about high prices, a…

Q: Refer to the graph shown. Assume the market is initially in equilibrium at point b in the graph but…

A: Market equilibrium condition in perfect competition determine socially optimal output where social…

Q: Suppose that the government has been supporting the price of corn. Its free market price is $2.50…

A: Price floor or support price is introduced by the govt. when govt. sets minimum price level at which…

Q: Note: No referencing is required for short answer questions. Using the information contained in the…

A: "Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: If the government imposes a price ceiling $50 per unit in the above market then which of the…

A: A price ceiling is the maximum legal price which can be charged by the producers in the market and…

Q: Does a binding price floor always leads to an increase in producer surplus?

A: A price floor is a government intervention in a free market where the price is set at a level that…

Q: Which of the following statement is true: a. There can never be price ceiling and price floor that…

A: A subsidy is an incentive provided by the government in financial support or aid to promote social…

Q: Suppose the supply of a good by domestic firms is QSD = 10 + 2P and the supply by foreign firms is…

A: Hi, thank you for the question. As per our Honor code, we are allowed to attempt only first three…

Q: Draw the supply curve, demand curve and solve for equilibrium (tax free) price and quantity. Solve…

Q: The market demand and supply functions for pork are: Q₂ = 2,000-500P and Qs = 800+100P. To help pork…

A: Buyers will demand less of an economic good at higher prices, according to the law of demand.. in…

Q: Consider the inverse demand and supply for dates to be given by P= 30-3Qd and P= 6+Qs, and the…

A: The demand function and the supply function can be calculating by rearranging the given inverse…

Q: In the market for energy drinks, with no market frictions, so there is no deadweight loss. The…

A: Given information; The equilibrium price of energy drinks is $4, The equilibrium quantity of energy…

Q: equilibrium price and quantity. 38.00- The total economic surplus is $ 96 per day. (Round your…

A: Total Economic Surplus=Consumer Surplus+Producer Surplus Consumer Surplus= Area above the price and…

Q: Suppose the demand for pickles on The Citadel is Qd=500-4P, and the supply is Qs=6P. Assume this…

A: The perfectly competitive is the type of market structure where there are large number of buyers and…

Q: • A market has the market supply equation as P = ½Q and the demand equation as P = 6 ½Q, where P…

A: please find the answer below.

Q: Price Supply A P, per "unit tax ! P, D. P2 F G

A: Producer surplus represent the difference among the amount producer is willing to supply for real…

Q: Draw a FULLY labeled graph that shows the welfare effects of imposing a binding price ceiling in the…

A: Introduction Consumer surplus is the consumer's gain which he get from exchange. It is the…

Q: Suppose the equilibrium price and quantity in a market are P=$3 and Q=40. If there is a ten cent tax…

A: Answer: option c ($3.80) Explanation: Government revenue=Tax amount×quantity after taxGovernment…

Q: The market for jelly has a supply and demand given by the following: QD=200–10p QS=20p–100 (a) What…

A: Given: QD=200–10pQS=20p–100 Note: Due to multiple subparts being posted, the first question has been…

Q: Explain the concepts of consumers' surplus and producers' surplus. Why in a competitive market…

A: Explain the concepts of consumers' surplus and producers' surplus. Why in a competitive market…

Q: Market demand for Mandrake roots is given by Q=419-3P and market supply is given by Q=3P. The…

A: Competitive markets are those which has a large number of buyer and sellers, selling homogenous…

Q: The market for dog beds currently has a price ceiling at $30. Demand for dog beds is P = 79-0.012Q…

A: Here we calculate the consumer surplus will they gain by using the given demand and supply , so…

Q: Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P, %3D Qs =…

A: We are going to use Binding Price floor mechanism to answer this question.

Q: Consider a market with a linear relatively Inelastic demand curve and a relatively Elastic linear…

A: disclaimer :- as you posted multipart questions we are supposed to solve the first 3 questions only…

Q: Market demand for Mandrake roots is given by Q=477-5P and market supply is given by Q=5P. The…

A: Price celling is an instrument of government to control the market imbalance.

Q: Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P,…

A: We are going to use equilibrium dynamics to answer this question,

Q: QUESTION 25 Suppose that demand changes, and the (inverse) demand curve moves P = 82 -0.5Q to P =…

A: In a amrket, the demand and supply schedules are expressed in a specific manner that explaisn the…

Q: Suppose that the demand curve for wheat is Q = 100 – 10p and the supply curve is Q = 10p. The…

A: Demand curve: Q = 100 - 10p Supply curve: Q = 10p At equilibrium, Demand = Supply100 - 10p = 10p20p…

Q: Which of the following would lead to the creation of some consumer surplus? Sam refuses to pay $10…

A: Consumer Surplus refers to the difference between willingness to pay of the consumer and the actual…

Q: Consider a free market with demand equal to Q = 1,200 – 10P and supply equal to Q = 20P. A. What is…

A: A ‘dead weight loss’ is the reduction in ‘economic production’ that occurs when a ‘free-market…

Q: Compute the consumer surplus when the market is at cquilibrium. Compute the producer surplus when…

Q: Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P,…

A: Binding price floor refers to the situation where the price of good is set greater than the…

Q: Which of the following statement is true: A. Since the subsidy increases both consumer surplus and…

A: The incentive that is given by the government in form of financial support or aid for the promotion…

Q: A10 An effective price ceiling causes a loss of: a) consumer surplus for certain and possibly…

A: The two types of pricing rules are binding and non-binding price limits. Because they do not produce…

Q: uppose market demand and supply are given by Q=2,800-8P and Q,=400+16P. the government imposes a…

A: Price floor is the minimum price which is set by the government for goods and services , this is…

Q: On April 20, 2010, an oil-drilling platform owned by British Petroleum exploded in the Gulf of…

A: According to the question, given that due to an explosion in the British petroleum in the Gulf of…

Q: The equilibrium price of a good is $13$⁢13. Suppose the government introduces a tax on this good. In…

A: The price at which the quantity demanded equals the quantity supplied is known as the equilibrium…

Q: Suppose that the demand curve for wheat is Q = 140 - 10p and the supply curve is Q = 10p. The…

A: here we calculate the Consumer Surplus , Producer Surplus and Deadweight loss which are as follow-

Q: Suppose now that the government decides to increase the number of quotas available to 72 units, but…

A: First, derive the equilibrium price and quantity: At equilibrium: Qd = Qs 180 – 2P = -15 + P 180 +…

Question

180
160
Supply
140
120
100
80
60
40
20
Denjand
10 20 30 40 50 60 70 80 90

If the government imposes a price floor of
$120 in this market, what is the dead weight
loss?
If the government imposed price floor of
$120, is removed and the price returns to
equilibrium. What are the gains in consumer
surplus by the current consumers
and the new consumers

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction to the concept

VIEW

Step 2 Solution to the above problem

VIEW

Step 3 Solution to the next problem

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

How does a price floor 521 above the equilibrium level affect quantity demanded and quantity1 supplied?
What is the effect of a price ceiling on the quantity demanded of the product? What is the effect of a price ceiling on the quantity supplied? Why exactly does a price ceiling cause a shortage?
What is consumer surplus? How is it illustrated on a demand and supply diagram?
Suppose both of these events took place at the same time. Combine your analyses of the impacts of the iPod and the tariff Induction to determine the likely impact on the equilibrium price and quantity of Sony Walkman-type products. Shaw your answer graphically.
Suppose there is a soda tax to curb obesity. What should a reduction in the soda tax do to the supply of sodas and to the equilibrium price and quantity? Canyon show this graphically? Hint: Assume that the soda tax is collected from the sellers.
What is the relationship between total surplus and economic efficiency?
What would be the impact of imposing a price flour below the equilibrium price?
In a market where the supply curve is perfectly inelastic how does an excise tax affect the price paid by consumers and the quantity bought and sold?
In 2018, a cold front in Barbados increased both the demand for water heaters andgasolines. The usage of gasoline was 581 tonnes, an increase from 499 tonnes in theprevious year. The Petroleum Company of Barbados advised Government officials thatdemand could outweigh supply and asked companies to increase the supply. They alsoasked major gasoline users, such as power plants, to reduce demand. iv. Discuss one factor EACH that you think influence demand and supply for waterheaters. Provide examples v. Is demand for gas is price elastic or price inelastic? Explain your reasoning
Consider the market for minivans. For each of theevents listed here, identify which of the determinantsof demand or supply are affected. Also indicatewhether demand or supply increases or decreases.Then draw a diagram to show the effect on the priceand quantity of minivans.a. People decide to have more children.b. A strike by steelworkers raises steel prices.c. Engineers develop new automated machineryfor the production of minivans.d. The price of sports utility vehicles rises.e. A stock market crash lowers people’s wealth.
Skii resorts have an inelastic supply, and motorcycles have an clastic supply. Suppose that a rise in population doubles the demand toboth products (that is, the quantity demanded at each price is twice what it was) a.What happens to the equilibrium price and quantity in each market?b. Which product experiences a larger change in price?c. Which product experiences a larger change in quantity?d. What happens to total consumer spending on cach product?
Suppose an economic boom drives up wages forthe sales representatives who work for cell phonecompanies. Explain what will happen to thedemand and supply of phones, and predict thedirection of the change in the equilibrium priceand quantity