100 Price'S 90 80 70 60 50 40 30 20 10 20 30 40 50 60 70 80 90 100 Thinking Caps Use the graph of the fictional market for thinking caps shown above to answer the following questions. Please answer the questions on your own sheet of paper or in a word document. Completed assignments should be uploaded to Blackboard for grading a) (1 Point) If the price of thinking caps was set at $30, does the market clear? b) (2Points) What is the quantity supplied and quantity demanded at the price of $30 from the above graph? Is there a shortage or a surplus of thinking caps in this market at this price? () (1 Point) Given your answer to part (b), what do you expect to see happen to the price of thinking cape! d) (2 Points) At what price and quantity does the market for thinking caps clear? 2) (3 Point) What is the value of the consumer surplus and producer surplus at this market-clearing price and quantity? f) (6 Points) To prove this level is efficient, it must be true that no other price and quantity will create more total surplus (consumer plus producer surplus). Calculate the producer and consumer surplus at a price of $62 and compare the total surplus to that found in (@) to state whether the market is efficient at the price found in part (@) or at the price of $62g) (6 Points) Using the following two points on the demand curve, determine if the demand for thinking caps is elastic or inelastic. Make sure to show your work for full credit. Make sure to use the mid-point formula to calculate percentage changes. Q. = 40 P. = $50 Q1 = 24 P. = $70 96AM= (X. - X,) (X, + X,)/2 h) (4 Points) List the following four items by elasticity staring with the most elastically demand good and ending with the more inelastically demanded good: (1) a baseball hit as a homerun by Shohei Ohtani at Wrigley Field; (2) a baseball hit as a homerun at a game; (3) a baseball hit into the stands at a game; (4) a baseball. BONUS QUESTIONS (1 Point Each) B1) What is the primary thing about a good or service that determines the price elasticity of demand? B2) If a market is efficient, does that also mean that the market outcome is fair