1). Suppose the demand and supply for gas generators in a coastal Florida town are as follows:

Q_d = 1800 – 3P

Q_s = 2P – 200.

a. Find the equilibrium price and quantity of generators.

b. Find the consumer surplus, producer surplus, and total gains from trade at the equilibrium price.

c. Question 2 asks you to consider the economic impacts of “price gouging.” Price gouging refers to suppliers raising their prices on essential goods (bottled water, gas, generators, airline tickets) during a crisis. Using the links that follow or a Google search, describe the costs and benefits of price gouging as described by economists. Then, discuss your opinion on the issue.

Answer rating: 100% (QA)

a To find the equilibrium price and quantity of generators we need to set the quantity demanded Qd equal to the quantity supplied Qs and solve for the ... View the full answer