Let's look at the market for bicycles. Suppose the inverse demand and inverse supply curve for...
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Let's look at the market for bicycles. Suppose the inverse demand and inverse supply curve for bicycles were given by the following two equations respectively: PD = 4,800 -0.4QD Ps= 300+ 0.1Qs a) (4 marks) Determine the free market equilibrium price for bicycles in this market, and the amount of bicycles that are sold. Calculate the consumer surplus and producer surplus. b) (7 marks) Suppose the government imposed a tax of 7 = $200 on the price of a new bicycle. Calculate the new equilibrium in this market. This includes finding The new equilibrium quantity sold. The price paid by consumers. The price received by firms. . The consumer surplus. . The producer surplus. The amount of tax collected by the government. . The deadweight loss. Let's look at the market for bicycles. Suppose the inverse demand and inverse supply curve for bicycles were given by the following two equations respectively: PD = 4,800 -0.4QD Ps= 300+ 0.1Qs a) (4 marks) Determine the free market equilibrium price for bicycles in this market, and the amount of bicycles that are sold. Calculate the consumer surplus and producer surplus. b) (7 marks) Suppose the government imposed a tax of 7 = $200 on the price of a new bicycle. Calculate the new equilibrium in this market. This includes finding The new equilibrium quantity sold. The price paid by consumers. The price received by firms. . The consumer surplus. . The producer surplus. The amount of tax collected by the government. . The deadweight loss.
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a Determine the free market equilibrium price for bicycles and the amount of bicycles that are sold Calculate the consumer surplus and producer surplus In a free market the equilibrium occurs when the ... View the full answer
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
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