**Will PAy VIAPAY PAL $10*** The numbers below are the numbers you use to plug i
ID: 1183719 • Letter: #
Question
**Will PAy VIAPAY PAL $10*** The numbers below are the numbers you use to plug in First, assume that there are no restrictions on the market and that the market will achieve its free-market equilibrium. Find . . . a. the market clearing price and quantity. b. the consumers' surplus. c. the producers' surplus d. the total benefit created by the market for consumers and producers. Next, suppose that for some reason, the quantity that may be sold is restricted to the number that was e-mailed to you. Find . . . e. the demand price and the supply price, PD and PS. f. the consumers' surplus. g. the producers' surplus. h. the total benefit created by the market for consumers and producers. i. the deadweight loss that is caused by the quantity restriction. the numbers to plug in---> QD = 8950 - 50P QS = 200P - 14800 The quantity restriction for parts e - i is 2800.Explanation / Answer
QD = 8950 - 50P QS = 200P - 14800 a) QD = QS 8950 - 50P = 200P - 14800 23750 = 250P P = $95 Q = 8950 - 50*95 = 4200 Ans: price = P= $95 quantity = Q = 4200 b) Pmax = ? QD = 0 8950 - 50 P = 0 P = $179 Consumer surplus = 0.5*Q*(Pmax - P) = 0.5*4200*(179-95) = $ 176400 .......here P = $95 and Q = 4200 are market price and quantity c) Pmin = ? QS = 0 200P - 14800 =0 P = $74 Producer's Surplus = 0.5*Q*(P-Pmin) = 0.5*4200*(95 - 74) = $ 44100 .......here P = $95 and Q = 4200 are market price and quantity d) Total benefit = Producer's surplus + consumer's surplus = $ 220500 Now when Q = 2800 d) Demand price ; 2800 = 8950 - 50 P P = $123 supply price ; 2800 = 200P - 14800 P = $88 f) So consumer's surplus = 0.5*2800*(179-123) = $78400 .....here P = $123 and Q = 2800 are market price and quantity & Pmax = $123 g) Producer's surplus = 0.5*2800*(88-74) = $ 19600 .....here P = $88 and Q = 2800 are market price and quantity & Pmin = $74 h) Total benefit = Producer's surplus + consumer's surplus = $ 78400 + $ 19600 = $ 98000 i ) deadweight loss = initial total benefit - total benefit after restriction = $ 220500 - $ 98000 = $ 122500
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