econ 204 hw4

# econ 204 hw4 - ECON 204 STUDY QUESTIONS 4 Equilibrium 1...

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ECON 204 STUDY QUESTIONS 4 Equilibrium 1) Suppose that demand for broccoli is given by g G = 400−2 ± G , and supply is given by g ² = 3 ± ² a) What is the price elasticity of demand when P=100? (Hint: Your answer should be a number) Show how you calculated it. b) Find the equilibrium quantity and price, and plot it on a graph. Label axes, intercepts,slopes of the demand and supply functions. c)Find the consumer surplus in this equilibrium. Find the producer surplus in this equilibrium. 2) We have the same demand and supply for brocoli in question ( g G = 400−2 ± G , and g ² = 3 ± ² ) now suppose that the government gives the producers a per-unit subsidy in the amount of 20 dollars (this means that for each unit they sell, they get \$20 from the government, in addition to what they are getting from the consumers). Find the new equilibrium price and quantity and prices, that is: a) What is the price received by the suppliers? b) What is the price paid by the demanders?

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econ 204 hw4 - ECON 204 STUDY QUESTIONS 4 Equilibrium 1...

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