HOMEWORK 1 HOMEWORK 1

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HOMEWORK 1

HOMEWORK 1

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Answered Same Day Feb 22, 2022

Solution

Komalavalli answered on Feb 22 2022

129 Votes

1. Option C
At equili
ium price both the parties will settle their price disputes resulting in quantity demand equals supply.
2. At equili
ium Qd = Qs
75-P = -45+2P
3P = 120
P = 120/3 = 40
Equili
ium price p* = $40
Substituting price p = $40 in equation Qd, we get
Qd = 75- P
Qd = 75-40
Q* = 35
Equili
ium quantity = 35
Option A
3.
Substituting Quantity Qs0= 0in equation Qs, we get
Qs = -45+2P
0 = -45+2P
P = 45/2
P0 = 22.5
Producer surplus = ½(Q*-Qs0)*(p*-p0)
Producer surplus = ½(35-0)*(40-22.5)
Producer surplus = ½(35)*(17.5)
Producer surplus = 612.5/2
Producer surplus = $306.25
Option E
4.
Substituting price ceiling price P1= 30in equation Qs, we get
Qs = -45+2P
Qs = -45+2*30
Qs = 60-45
Qs1 = 15
Producer surplus = ½(Qs1-Qs0)*(p1-p0)
Producer surplus = ½(15-0)*(30-22.5)
Producer surplus = ½(15)*(7.5)
Producer surplus = 112.5/2
Producer surplus = $56.25
Option C
6.Option A
7.P = 62 – 0.1Q
MC = 16
Monopoly equili
ium is MC = MR
TR = P*Q
TR = (62 – 0.1Q)*Q
TR = 62Q – 0.1Q2
MR = dTR/dQ
MR = 62-0.2Q
At equili
ium
MR =MC
62-0.2Q = 16
0.2Q = 62 – 16
Q...

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