Use The Accompanying Graph To Answer These Questions S So 20 18 16 14 12 10 Price Of X 8 6 4 2 0 1 2 3 4 Quantity O 1 (106.73 KiB) Viewed 10 times
Use the accompanying graph to answer these questions. S so 20 18 16 14 12 10 Price of X ($) 8 6 4 2 0 1 2 3 4 Quantity of Good X units 5 6 D a. Suppose demand is D and supply is SO. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price? Shortage: Full economic price: $ b. Suppose demand is D and supply is sº. If a price floor of $12 is imposed, what is the resulting surplus? What is the cost to the government of purchasing any and all unsold units? Surplus: Cost to government: $
c. Suppose demand is D and supply is so so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? Equilibrium price paid by consumers: $ Price received by producers: $ Number of units sold: d. Calculate the level of consumer and producer surplus when demand and supply are given by D and SO respectively. Consumer surplus: $ Producer surplus: $ e. Suppose demand is D and supply is sº. True or False: A price ceiling of $2 would be beneficial to consumers? False units True
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