- The Below Graph Shows The Market Of Computers The Equilibrium Is At Point E Price S 700 650 600 550 E C 500 450 400 1 (40.87 KiB) Viewed 28 times
- The Below Graph Shows The Market Of Computers The Equilibrium Is At Point E Price S 700 650 600 550 E C 500 450 400 2 (152.18 KiB) Viewed 28 times
The below graph shows the market of computers. The equilibrium is at point "E": Price S $700 650 600 550 E c 500 450 400 350 300 0 7 8 9 10 11 12 13 14 Quantity (millions per year)
1. The government intervenes by setting a maximum price to sell at of 450$. What type of Price control is it (price floor or price ceiling)? Is it biding? Explain your answer. 2. Will this create a surplus or shortage in the market? Calculate it (show your calculations) 3. Calculate the deadweight losses created by this intervention. (show your calculations). (20 points 4. Calculate the new producer Surplus created from this intervention (show your calculations). (10 points) 5. If the Government sets a Quota of 8 million tickets, calculate the Quota rent. (show your calculations). (10 points) 6. Calculate the deadweight loss due to the quota. (10 points)