b) Using the model of supply and demand, illustrate how the market would change if the government levied a tax on cups of coffee for each cup sold, and at the same time the number of coffee shops increases because it is such a profitable business model. How would you expect equilibrium price and quantity to change? Be sure to discuss which determinants of supply and demand would have been affected. c) in a new graph, illustrate the impacts of a binding price floor. Identify the components of social welfare and discuss how efficiency and equity are impacted by the price ceiling (as compared to the market setting without a price ceiling). 3. In the following table are demand and cost data for a pure monopolist. Complete the table by filling in the columns for total revenue, marginal revenue, and marginal cost. Answer these three questions: (a) What output will the monopolist produce? (b) What price will the monopolist charge? (c) What total prot will the monopolist receive at the profit-maximizing level of output? (d) Illustrate the monopolist's problem graphically (draw a generic monopolist problem no need to try and represent the specific data above). Be sure to indicate both the monopolist's profit maximizing price and quantity and any deadweight welfare loss that might exist. Explain why there does or does not exist any deadweight welfare loss, and discuss why the government may want to regulate this monopoly. Total Marginal Total Marginal Quantity _Price revenue revenue cost cost 0 $30 '5: 5 20 1 29 36 '23 2 28 46 3 27 _ 50 4 26 _ _ _ 54 5 25 ______ ______ 56 __ _ 6 24 ___ ____ 62 ___ 7 23 ___ _____ 70 ___ 8 22 __ __ 85 __ 9 21 __ ____ 104 ___ 10 20 135 Assignment #5 Please submit your work by midnight on Monday, November 27, 2023 Either type the answers out or write iegibiy by hand. Show oii of your work. Answer all ports to all questions! Pieose submit either a pd jpeg, or word document (so scan, photograph, or type your work). 1. Use data in the following table to explain the economic effects of a price ceiling at $8 and at $10. Explain the economic effects. Quantity Quantity demanded supplied Price $10.00 3000 4500 9.00 3500 3500 8.00 4000 2500 7.00 4500 2000 2. Consider the market for 16 02. cups of coffee, which is characterized by the market supply and market demand schedules in the table below. Quantity Quantity Price demanded supplied $7.00 150 300 6.50 155 275 6.00 165 250 5.50 180 225 5.00 200 200 4.50 225 175 4.00 255 150 3.50 290 125 3.00 330 100 a} At a price of $4.00, is the market in equilibrium? If not, calculate any shortage or surplus. If the market is not in equilibrium, solve for equilibrium and explain what pressure the pricing mechanism will put on prices {in other words, how would you expect prices to change and why)