{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

sec_7 - MC = 0 5 Q What government price ceiling would...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
PAM 2000: Section Handout 7 TA : Romita Mukherjee April 7, 2009 (1) Suppose anyone with a driver’s license is capable of supplying one trip from the airport to the downtown business center on any given day. The long run supply curve of such trips is horizontal at p = $50, which is the average cost of such trips. Suppose daily demand is Q = 1000 - 10 p. Calculate the change in consumer surplus, producer surplus and social welfare if the city government requires those people supplying such trips to possess a special license, and the government will only issue 300 licenses. (2) A monopoly faces an inverse demand curve of P = 100 - 2 Q . The marginal cost curve is
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: MC = 0 . 5 Q. What government price ceiling would represent optimal price regulation? 1 (3) The above figure shows supply and demand curves for milk. In an ef-fort to help farmers, the government passes a law that establishes a $3 per gallon price support. To maintain the price support, government expenditures must equal (A) k + i (B) f + g + h + i + j (C) f + g + h + i + j + k (D) f + g + h + i + j + k + e (4) Suppose that market demand for a good is Q = 480-2 p . The marginal cost is MC = 2 Q . Calculate the deadweight loss resulting from a monopoly in this market. 2...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern