Basic Model For each scenario descibed above, find the equilibrium and answer th
ID: 1147705 • Letter: B
Question
Basic Model For each scenario descibed above, find the equilibrium and answer the folowing questions about that ilbrun outcome You wikely find draarg appropriate diga-s to be helplu What quantity (Q) wil be produced and consumed? What will be the market price (P? To receive credit for this assignment you must submit your answers in Moodle by the deadline You will be asked for some (but not all) of the answers. The An Esanamic Model of Markets reading (especialy the Market Equilibrium section, pg 20-23) may be heiprual What is the total paid (TP) by consumers? What is the total benefit (TB) to consumers? e What is the consumer surplus (CS)? What is the total revenue (TR) received by producers? The model used in this assignment is based on the following assumptions. Short-term equilbrium in a market characterized by perfect compecition is the basic model typicaly introduced as the first model in an introductory undergraduate course in microeconomics What is the total variable cost (TVC) incurred by producers? What what is the joint the producer ms (PS)? pla(JS)? . Answers Rational consumers who maximize ublity Wnite your answers in the following table. You should keep this table (and your notes and calculations) for discussing the problem in class Rational producers who maximize profits . Consumers and producers are price-takers . Some factors of production are fixed Perfect compettion Short-term equilbriunm Scenario A Scenario E Scenario (C . No entry or exit Quantty (Q) No market failure Market price No government intervention (ie, free market, Aassez fare) . Total paid (TP) Total benefe (TB) Consumer surplus (CS) Total revenue (TR Total variable cost (TVC) Producer surplus (PS) Joint surplus (JS) Problem Setup Analyze the following three scenarios (A, B, and C) describing the market for widgets. Think of Scenario A as the baseline situation, with B and C representing possible changes in the market Scenario A . The market (aggregate) demand for widgets is P 100-4Q, where Q is the quantity of widgets demanded The market (aggregate) supply of widgets is P·10 + 5Q, where Q is the quantity of widgets supplied * Scenario B Market demand remains the same as in scenario A (P 100-4) Market suap increases to P 10+2Q Scenario C Market demand naeases to P= 130-Q. Market supcly remains the same as in situation A (P * 10 50) AGEC 3503 HW2-Basic Model AGEC 3503 HW2-Basic ModelExplanation / Answer
Equilibrium:Qd=Qs
Scenario A.
100-4Q=10+5Q
9Q=90
Q=10
P=60
Total paid=P*Q
TP=60*10=600
Scenario B.
100-4Q=10+2Q
6Q=90
Q=15
P=40
TP=600
Scenario C
130-Q=10+5Q
6Q=120
Q=100
TP=2200
This question has multiple parts.Further each question requires its solution.I've answered as much as I could.According to guidelines 4 sub parts can be answered.