Say the demand schedule for ice cream cones can be represented by the equation Qd=160-3P and the
Question:
Say the demand schedule for ice cream cones can be represented by the equation Qd=160-3P and the supply schedule can be represented by the equation Qs=140+7P.
Q;1 Calculate the equilibrium price and quantity in this market. Calculate Consumer surplus and producer surplus at this equilibrium.
Q.2 Say the Canadian Association of Ice-Cream Eaters complains that the equilibrium price calculated in part a is too high, and their member cannot eat enough at this price. They lobby the government to impose a price ceiling on cones $1. What is the quantity demanded at this price? The quantity supplied? Is there a shortage or surplus? How big is it? What are the new consumer surplus and producer surplus? Is the total surplus more or less, and by how much?
Managerial Economics and Organizational Architecture
ISBN: 978-0073375823
5th edition
Authors: James Brickley, Jerold Zimmerman, Clifford W. Smith Jr