Question
1. The supply curve for product X is given by Q X S = -420 + 20 P X . a. Find the inverse supply
1.
The supply curve for productXis given byQXS= -420 + 20PX.
a. Find the inverse supply curve.
P=_______+________Q
b. How much surplus do producers receive whenQx= 380? WhenQx= 1,060?
WhenQX= 380: $_______
WhenQX= 1,060: $_________
2.
Consider a market where supply and demand are given by QXS= -14 + PXand QXd= 91 - 2PX. Suppose the government imposes a price floor of $42, and agrees to purchase and discard any and all units consumers do not buy at the floor price of $42 per unit.
Instructions:Enter your responses rounded to the nearest penny (two decimal places).
a. Determine the cost to the government of buying firms' unsold units.
$________
b. Compute the lost social welfare (deadweight loss) that stems from the $42 price floor.
$________
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