For All Questions Refer To The Graph On Page 2 Which Represents The Market For Baby Formula Estimation May Be Necessar 1 (47.58 KiB) Viewed 10 times
For All Questions Refer To The Graph On Page 2 Which Represents The Market For Baby Formula Estimation May Be Necessar 2 (22.99 KiB) Viewed 10 times
For All Questions Refer To The Graph On Page 2 Which Represents The Market For Baby Formula Estimation May Be Necessar 3 (71.49 KiB) Viewed 10 times
For all questions, refer to the graph on page 2 which represents the market for baby formula. Estimation may be necessary, so it is suggested that you show your work when applicable. 1. Assuming the free market outcome, calculate the following: (8 pts.) a. Price b. Quantity demanded c. Quantity supplied d. e. Consumer Surplus f. Producer Surplus Any surplus or shortage g. Resource Misallocation h. Deadweight Loss 2. Concerned about the rising price of all goods, a price ceiling of $12 on formula is enacted. Redo all parts of # 1. (8 pts.) 3. Has the price ceiling helped consumers? Explain. (4 pts.) 4. Fearful that producers will react poorly to the low price, a price floor of $30 is enacted. Redo all parts of #1. (8 pts.) 5. Has the price floor helped producers? Explain. (4 pts.) 6. Using the graph, calculate the following at the free market outcome: (4 pts.) a. Pe b. Qe
d. Ps 7. In an attempt to prevent hoarding, a $6 tax per unit on buyers of formula is enacted. Calculate the following after this tax: (8 pts.) a. Pe b. Qe c. Pb d. Ps e. Consumer Surplus f. Producer Surplus g. Resource Misallocation h. Deadweight Loss 8. Who pays a larger share of the $6 tax? Show how you found this. (6 pts.)
57 45 36 27 21 15 9 6 3 Price 5 10 20 30 40 Demand 50 60 70 Supply 80 Qty
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