Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please confirm if the answers chosen to the following questions are correct Question 4 Carefully explain what is happening in the following markets. Indicate the
Please confirm if the answers chosen to the following questions are correct
Question 4 Carefully explain what is happening in the following markets. Indicate the impact if any on demand, supply, price and quantity Scenario 1: Market for 21 ft Ladders Pals 21-FOOT LADDER RENTALS OPEN SOOHL Impact on demand Shift outwards / to right Impact on supply No Impact $ Impact on price Increase equilibrium price $ Impact on quantity Increase equilibrium quantityScenario 2: Market for Box Fans WHERE ARE I'M SORRY, WE'VE WE'RE IN THE MIDDLE OF A YOUR BOX FANS? SOLD OUT OF THEM. 100-DEGREE HEAT WAVE! HOW COULD YOU SELL OUT OF FANS?! 8/28 Dist. by King Features Syndicate, Inc. 2010 Norman Feuti, Impact on demand Shift outwards / to right Impact on supply No Impact Impact on price Increase equilibrium price $ Impact on quantity Increase equilibrium quantityScenario 3: Market for lemonade THINK PLOPLE MATEL I SHOULD WILL SUSPECT THAT MOVE DOWN THE WE'RE IN CAHOOTS STREET SOME. Ence Free extra-salty Lemonade Popcorn $50 64 x 306 Impact on demand Increase towards equilibrium + Impact on supply No Impact $ Impact on price Increase equilibrium price $ Impact on quantity Increase equilibrium quantityQuestion 5 Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, 5 is the supply curve before tax and ST is the supply curve after the tax. Seller's reservation price 3 Price paid by consumers 10 Quantity of cigarettes sold 12 Buyer's reservation price 18 Price paid by producers 10(b) Calculate the consumer surplus before the tax. Answer: 48 (c) Calculate the producer surplus before the tax. Answer: 42(d) For the market for cigarettes with the tax. Indicate: (i) the tax Price paid by consumers Price received by producers 3 3 Quantity of cigarettes sold Price received by producers Quantity of cigarettes sold 10 Price paid by consumers 12 the tax 4(e) (i) Calculate the consumer surplus after the tax. Answer: 30 (e) (ii) Calculate the producer surplus after the tax. Answer: 25 (e) (iii) Tax revenue. Answer: 40Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started