PLEASE HELP! WILL RATE HIGH Suppose demand and supply are given by Q d =50 - Pan

Question

PLEASE HELP! WILL RATE HIGH Suppose demand and supply are given by Qd =50 - Pand Qs = 1/2P - 10. a What are the equilibrium quantity and price in thismarket? b. Determine the quantity demanded , the quantity supplied,and the magnitude of the surplus if a price floor of $42 is imposedin this market. c.Determine the quantity demanded, the quantity supplied, andthe magnitude of the shortage if a price ceiling of $30 is imposedin this market d. Determine the full economic price paid by consumers. PLEASE HELP! WILL RATE HIGH Suppose demand and supply are given by Qd =50 - Pand Qs = 1/2P - 10. a What are the equilibrium quantity and price in thismarket? b. Determine the quantity demanded , the quantity supplied,and the magnitude of the surplus if a price floor of $42 is imposedin this market. c.Determine the quantity demanded, the quantity supplied, andthe magnitude of the shortage if a price ceiling of $30 is imposedin this market d. Determine the full economic price paid by consumers. Suppose demand and supply are given by Qd =50 - Pand Qs = 1/2P - 10. a What are the equilibrium quantity and price in thismarket? b. Determine the quantity demanded , the quantity supplied,and the magnitude of the surplus if a price floor of $42 is imposedin this market. c.Determine the quantity demanded, the quantity supplied, andthe magnitude of the shortage if a price ceiling of $30 is imposedin this market d. Determine the full economic price paid by consumers.

Explanation / Answer

The equilibrium price and quantity is where the quantity demandedis equal to the quantity supplied. Which means that Q_equilibrium = 50 - P = 1/2P - 10 Solve for P. 60 - P = 1/2P = .5P 60 = 1.5P P = 40 Quick check:. 50 - 40 = (.5)(40) - 10 10 = 10. Checks. b and c. You just have to plug the prices given into P,essentially, and find the difference between the two. The surplusor shortage is equal to the quantity supplied minus the quantitydemanded. Therefore, b. Qd = 8, Qs = 11. Surplus of 3. c. Qd = 20, Qs = 5. Shortage of 15. d. The full economic price is the price paid to a firm under aprice ceiling plus the amount the consumers are willing to payabove and beyond that price. It is found by taken the price at theprice ceiling ($30) and extending a vertical line upward from thatsupply curve at the point until it reaches the demand curve. Soit's $30 + (The amount at the point where the vertical line youdrew touches the demand curve - $30). To solve it using algebra... Qs = 8. Plus this into Qd... 8 = 50 - P, P = 42. Therefore the amount is $30 + ($42 - $30) = $42. (Solution) Might want to check that. It makes sense in terms of my graph butit was kind of quick and I never actually calculated the FEP in aclass. Ever.

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