--%>

Market Apparent program

For the question below, utilize the given information. The market for gizmos is competitive, with an increasing sloping supply curve and a downward sloping demand curve. With no govt. intervention, the equilibrium price is $25 and the equilibrium quantity is 10,000 gizmos. Consider the given programs of government intervention:

Program I: The govt. obliges an excise tax of $2 per gizmo
Program II: The govt. gives a subsidy of $2 per gizmo for gizmo producers.
Program III: The govt. obliges a price floor of $30.
Program IV: The govt. obliges a price ceiling of $20.
Program V: The govt. permits no more than 8,000 gizmos to be generated.

Beneath which of such programs will the market obvious? Explain briefly.

E

Expert

Verified

With the subsidy or excise tax, the market will obvious (that is, Programs I and II).

With the price floor (that is, Program III) there will be surplus supply, therefore the market will not apparent.

With the price ceiling (that is, Program IV) there will be surplus demand, therefore the market will not apparent.

With the production quota (that is, Program V) the price consumers pay will surpass $25, therefore there will be surplus supply. The market will not apparent.

   Related Questions in Business Economics

  • Q : Difference between normal and inferior

    Difference between normal goods and inferior goods. Give illustration.

  • Q : What are economic resources What are

    What are economic resources? What are the major functions of the entrepreneur?

  • Q : Wealth of Nations - pioneering survey

    The Wealth of Nations that a pioneering survey of economic treated was published within: (1) 1849 year, and written by Karl Marx. (2) 1936 year, and written by John Maynard Keynes. (3) 1776 year, and written by Adam Smith. (4) 141 BC,

  • Q : Allocative Mechanisms-market based

    The market-based economic system: (1) Appears to be ‘natural’ as it has existed in all societies. (2) Has dominated the economic relationships in United States since from the year1492. (3) Guided resource allocation in middle ages. (4) Is

  • Q : Distinguish between the resource market

    Distinguish between the resource market and product market in the circular flow model.  In what way are businesses and households both sellers and buyers in this model?  What are the flows in the circular flow model?

  • Q : Resource market for economic capital

    Janet has loaned a start-up coffee house $50,000 and predicts to earn interest from her financial investment. In circular flow model this transaction is an illustration of: (1) An exchange of her saving for interest, via a resource market for the economic capital. (2)

  • Q : Marginal rate of substitution Problem:

    Problem: Luke likes to consumer CDs (good1) and pizzas (good 2). His preference over both goods is given by the utility function U(x1; x2) = x21

  • Q : Why private goods are produced through

    Why private goods are produced through the market?

  • Q : Comparative Advantage-Mutual exchange

    Mutually beneficial exchange is probable whenever relative production costs vary previous to trade, is a manner to state the law of: (1) Positive profits from trade. (2) Comparative benefit. (3) Specialization and Division. (4) Purchasing power parity

  • Q : Illustrate the advantage of corporate

    Illustrate the advantage of corporate form of organization?