Drop down options: 1: $6 $5 $4 2: 67, 100, 0, 95 (MILLION) 3: $603, $306, $54, $

Question

Drop down options: 1: $6 $5 $4 2: 67, 100, 0, 95 (MILLION) 3: $603, $306, $54, $909 (MILLION) Please help with all parts!! hering Pea.. CengageBa n My Home Suggested Stes. webSice Gallery The following graph shows the market for paint Use the graph nput tool to hetp you answer the following questions. You wall not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey field will change accordingly Graph Input Tool 12 1 Price Dellars per gallon) or galons) of galons) 10 antity demanded 112 Rantitysuppond- of gallons Shortage (Mailions of gellions) 90 0 15 30 45 60 75 90 105 120 135 QUANTITY (Mitions of gallons)

Explanation / Answer

Answer:- The market price of paint without government intervention is $6 per gallon

Reason:- The market price is the price at which the quantity supplied equals the quantity demanded. Here, this occurs at $6 per gallon.

Answer:- Consider legislation that doesn't allow the price of paint to be below $9 per gallon and stipulates that the government buy any surplus paint produced at that price. In order to raise the price to $9 per gallon, the government would need to buy 67 million gallons of paint, which would cost the government $603 million.

Reason:- At a price of $9 per gallon, there is a surplus (excess supply) of 67 million gallons. Surplus is the difference between the quantity supplied and quantity demanded:

Demand at $9:- 37.5 million gallon and supply is 97.5 million gallon (Values are taken approximately)

Thus surplus = 97.5-37.5 = 60 Million Gallon so from the options the nearest value is 67)

Therefore, in order to maintain a price of $9 per gallon, the government would have to buy 67 million gallons at a price of $9 per gallon, which would cost the government $9*67=$603 million

Answer:- Suppose there are only a few paint producers who would benefit from this legislation and millions of consumers who would suffer through higher prices. In this case, legislation imposing price supports at $9 per gallon would mean which of the following?

Correct Answer:- The legislation will probably pass because its benefits are concentrated while its costs are widespread.

Reason:- Price supports are an example of special interest legislation, which is defined as legislation with concentrated benefits but widespread costs. Because its benefits are concentrated, a few political actors (in this case, paint producers) would feel very strongly about this legislation and would lobby hard for its passage. Because its costs are widespread, these lobbyists would face little opposition, since voters' decisions aren't going to be swayed by small changes in the price of paint.

I REQUEST YOU TO KINDLY RATE THE ANSWER AS THUMBS UP. THANKS A LOT.

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.