The goal of this problem is to understand the concepts of the demand and supply, in a specified market.

Problem 1

This is a case of local productions: Taking the market for cloth production is directly affected bt the demand and supply in the market.

P=100-q/100 and p=q/100.

For example, let's say cotton farmers lobby for legislation that mandates that the government purchase any surplus cotton to ensure that a $60 unit price is achieved.

In what number of units do consumers opt to buy? Approximately how many units does the government buy? Make a distinction between consumers' excess and producers' excess

If cotton storage costs $10 per unit, what is the government's total cost in this case? Suppose, instead of a price floor, the government implements a price guarantee program with a target price of $60 as the target price. A farmer is paid the difference between what he or she receives from consumers and the price set by the government \

What will the farmers produce in terms of volume? At what price point will consumers be willing to part with their cash? How much money will the government be paying farmers in the coming year? 6. Is it mandatory for the government to do so? What is the total cost of the storage?

Problem 2

The demand and supply for the healthcare products are given the equations q=20-p and p=1/3q respectively.

Show the equilibrium price and quantity (calculations must be showed)

Suppose a tax of $ 4 is introduced by tax authorities on each good sold

Solve the following:

Calculate the new quantity demanded, the sellers' net price, and price paid by consumers.

Using calculation show the amount of revenue the tax authority collects.

Calculate the (DWL), due to taxation. Indicate the portion of the dead weight loss to each player.

What portion of the economic incidence of tax is taken by the consumers?

Explain what would have happened if the tax imposed to the sellers was shared between consumer and producers (consumer = $1.11 units and Producers $2.89)

Problem 3

The market for healthcare professionals is used in this case: The following equation show the demand and supply the professionals.

Q=2000-10p

Q= 20p-400

Find the equilibrium

Supposed the SHTN works with government officials to see the professionals receive a license; the two authorities settled on 600 licenses; determine the following.

What is the wage received? How many got employed?

Calculate the DWL due to the changes.