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City government requires those people supplying such

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Unformatted text preview: ',+!01+!24&8+0!,)--.7!*)&C+!3'&!;1+40!/,!,1';5!/5!01+!46'C+!3/?)&+9!L4.*).40+!01+! K producer s!*+.6!!4.(8-2%/!!ACC!$2.+?/,.40/'5!245(40+,!0140!01+!-&/*+!6+!m!andates that the price be $1 per -&'()*+&!,)&-.),!;1+5 -&/*+!/,!M#price is !H3! per b! >"!! &2$ urplus when !-+& 6),1+.94+55&/9 ushel. If legislation M! -+&! % 6),1+.I!;140! hat &+,).0/5?! esulting loss in p ! bushel, w/,!01+!is the r.',,!/5!-&'()*+&!,)&-.),Froducer surplus? <3/0%.?4!:! !'3!M#I!-&'()*+&!,)&-.),!+A)4.,!NM!9J"!!!!#""$O#!!!MP""9!:0!4!-&/*+!'3!M!I! :5,;+&<!!! ! !!! :0 -&/*+ !"#$%&!!!-&'()*+&!,)&-.),!+A)4.,!NM"9J"!!!J""$O#!!!M!#J9!>1+!M!!(+*&+4,+!/5!-&/*+,!&+,).0,!/5!4! '"()*"+!,"-./! MQQJ! why ! he competitive 3. Explain(+*&+4,+t/5!-&'()*+&!,)&-.),9! output maximizes welfare. 0(.1+$"*!2+3+(1&!!! .5$1.-! 1".*78!!! #"327&#!:&('/#&! 7 9 ;2&0$*"+!<$/$208!!! #&=*"20!>3*$*"+! 9 4. Suppose anyone with a driver’s license is capable of supplying one trip from the airport to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center o BGG!0)(-2.-.9! the downtown business!)..=-!/20+!n any given day. The long-run supply curve of such trips is :2.4-1;!!! at (/58-*)*)?-! hich is the a H!"!!GGG! ost !! such trips. S *3-!.=880+!1-.*1)(*)/2! horizontal<3-!p = $50, w-J=)0)71)=5!).!verage c!!K!Gof!FG$!"!FGG9!L)*3!uppose daily demand is Q = /& 1000 - 10p.!BGGA!81)(-!7-(/5-.!E"G9!<3-!0/..!)2!./()'0!surplus, !producer!sKFGG!!!BGG$NO#!social welfare if Calculate the change in consumer 4-0&'1-!). MK"G!!!FG$! ! urplus and "! E#AGGG9!P1/,=(-1.!@')2!K"G!!!FG$!!!BGG!"!EQAGGG9!I/2.=5-1.!0/.-!EQAGGG!#!E#AGGG!"! the city government requires those people supplying such trips to possess a special license, ERAGGG9! and the'government.0##(1!issue! only 300 licenses. !"#$%&!!! "($%$)*!+,-+!.,$/+! will 2034)* 50)*+$"6!.+-+0*&!!! 3)4$"0*!78$+$"6! ' 5. ! ! The above &)@=1-! shows the demand .=880+!(=1?-.! urves in the m 5)0T9 for m !S$!! 3-!'7/?-!figure.3/4.!*3-!,-5'2,!'2,!and supply c)2!*3-!5'1T-*!&/1!arket!%&!*3-! ilk. < government !imposes !a quota!FGG500 gallons, calculate the deadweight loss. @/?-125-2* )58/.-.!...
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