Price (dollars per loaf) Quantity demanded (loaves per day) Quantity supplied (l
ID: 1177271 • Letter: P
Question
Price
(dollars per loaf)
Quantity demanded
(loaves per day)
Quantity supplied
(loaves per day)
0.60
240
0
0.80
200
80
1.00
160
160
1.20
120
240
1.40
80
320
1.60
40
400
1.80
0
480
1.What is the maximum price that consumers are willing to pay for the 80th loaf of bread?
2.What is the minimum price that producers are willing to accept to produce 240 loaves of bread?
3.What is the efficient quantity of bread?
4.Calculate the consumer surplus at the efficient quantity?
5. Calculate the producer surplus at the efficient quantity?
Price
(dollars per loaf)
Quantity demanded
(loaves per day)
Quantity supplied
(loaves per day)
0.60
240
0
0.80
200
80
1.00
160
160
1.20
120
240
1.40
80
320
1.60
40
400
1.80
0
480
Explanation / Answer
maximum price that consumers are willing to pay for the 80th loaf of bread = $1.40
minimum price that producers are willing to accept to produce 240 loaves of bread = $1.20
efficient quantity of bread = 160 (as supply = demand)
consumer surplus at the efficient quantity = 1/2*(1.8-1)*(160) = 64
producer surplus at the efficient quantity = 1/2*(1)(160) = 80
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