Della Software earned $10 million this year. Suppose the growth rate of Delta\'s

Question

Della Software earned $10 million this year. Suppose the growth rate of Delta's profits and the interest rate are both constant and Delta will be in business forever. Determine the value of Delta Software when: The interest rate is 10 percent and profits grow by 4 percent per year. The interest rate is 10 percent and profits decline by 4 percent per year. Consider a market characterized by the following inverse demand and supply functions: P_x = 10 - 2Q_x and P_x = 2 + 2Q_x Compute the loss in social welfare when an $8 per unit price floor is imposed on the market. Also show this graphically. The demand curve for product X is given by Q_x = 50 - 2P_x. How much consumer surplus do consumers receive when P_x = $5? Suppose demand and supply functions arc given as Q_x^d = 7 - 1/2 P_x and Q_x^-d = 1/4 P_x - 1/2 respectively. If a $6 excise tax is imposed on the good, what w ill be the impact on equilibrium price and quantity? Show the change in numerical value as well as graphically. How much revenue docs the government earn with a $6 tax? The demand curve for a product is given by: Q_x^d = 1,000 - 2P_x + .02 P_z, where P_z. is $400. What is the own-price elasticity of demand if P_x is $354 ? Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decides to change price above $354 ? What is the cross-price elasticity of demand between goods X and Z when P_x = $154 ? Are they substitutes or complementary?

Explanation / Answer

Multiple questions asked.

Kindly ask one question per post.

Q3 is answered below.

Demand curve: Q = 50-2P

When P = $5, Q = 50-2(5) = 40 units

P when Q = 0 will be $25

Consumer surplus = (1/2)×(P*-P)×Q

Consumer surplus = (1/2)×(25-5)×40

Consumer surplus = 400

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