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In the new equilibrium with the tax, what price will producers receive and consumers pay if the supply curve is a) Perfectly elastic?
Analyze the reporter's claim by determining the price buyers pay before and after the subsidy, and provide intuition to explain why the reporter is correct or i
If an excise tax of $4 leads to an increase in the price of gadgets to $24, what must be true about the own-price elasticity of supply for gadgets?
Why does a market clear when the government gives producers a subsidy of $S per unit? Why does the market not clear with a production quota?
Why are agricultural price support programs, such as acreage limitation and government purchase programs, often very costly to implement?
Will a price ceiling always increase consumer surplus? Will a price floor always increase producer surplus?
Why will consumer surplus increase? Will producer surplus increase? Will there be a deadweight loss?
A tax of size $T is currently imposed in the market. Suppose the tax is doubled. By what multiple will the deadweight loss increase?
Why can a monopolist's marginal revenue be negative for some levels of output? Why is marginal revenue negative when market demand is price inelastic?
Why is demand curve facing a monopolist market demand curve? Why is marginal revenue for a monopolist less than market price for positive quantities of output?
How much would the government need to spend to achieve this? What is the total deadweight loss if the government is successful in its objective?
Suppose the government bans the import of television sets. How much would domestic producer surplus and deadweight loss change?
In a free market the price is $30 per ton. If an excise tax of $2 per ton is imposed in the market, what will be the resulting deadweight loss?
How much would the government collect in tariff revenues? By how much would the tariff increase producer surplus for domestic radio suppliers?
Consider a perfectly competitive market in which the market demand curve. Find the equilibrium price and quantity in the absence of government intervention.
Which government intervention results in the lower deadweight loss and why? How will consumer surplus differ in these different government interventions?
Find the consumer surplus and producer surplus in the absence of the subsidy. What is the net economic benefit in the absence of a subsidy?
Find the equilibrium market price and quantity demanded and supplied in the absence of price controls.
Calculate the profit-maximizing monopoly quantity and compute the monopolist's total revenue at the optimal price.
Calculate the price elasticity of demand at the monopolist's profit-maximizing price. Also calculate marginal cost at the monopolist's profit-maximizing output.
Assume that a monopolist sells a product with the cost function. How much profit does the firm earn when it charges the price that maximizes profit?
Under what conditions will a profit-maximizing monopolist and a revenue-maximizing monopolist set the same price?
How will the sunk and nonsunk fixed costs affect the firm's decisions as it tries to maximize profit in the short run?
What is the firm's profit if it operates and it maximizes profit? Should the firm continue to operate in the short run, or should it shut down? Explain.
A monopolist operates in an industry where the demand curve is given by Q = 1000 - 20P. What is the monopolist's profit-maximizing price?