Hey guys, I\'ve gone through the work and answered most of these questions, howe
ID: 2439019 • Letter: H
Question
Hey guys, I've gone through the work and answered most of these questions, however I'd really like to compare my answers to someone else's. Can anyone help me out? These are questions from Chapters 6, 7, and 9 out of Parkin's Microeconomics text book. Any answers help and are greatly appreciated!
Chapter 6:
Chapter 7:
Coming into Chapter 9:
Thank you so much for any help!! I need it.
sheet below your own. Chapter 6: 1. Price 30 27 24 21 18 12 Di 3 6 9 12 15 18 21 24 Quantity If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would the shortage/surplus be? Please explain your answer. a. 2. Suppose that demand in the market for good X is given by the equationExplanation / Answer
Answer
Chapter 6
1)
There will be no change in surplus.
Price ceiling means maximum price that can be charge for given commodity hence, Price ceiling is used and changes surplus when charge below Market Price In this question Market Price = $12 and Price ceiling is at $15.
2)
Qs = 2P
QD =30-P
equilibrium occurs when supply and demand intersects
Qs = QD
30 - P = 2P
Implies Equilibrium Price P* = 30/3 = 10
b)Quilibrium Quantity
Qs = 2*10 = 20
Q* = 20
c)
Price ceiling is at $8
At $8 Qs = 2*8 = 16
At QD = 16 Price =12
Deadweight loss = 0.5*16*(12-8)
= 32
Hence Total Surplus decreases.