### Find the original producer surplus

##### Reference no: EM131159688

How do i find the original producer surplus? The imposition of a \$1.50/unit excise tax on a competitive market raises the price buyers pay (inclusive of the tax) by \$0.60/unit and reduces the volume of trade in the market from 2000 units/day to 1600 units/day. Assuming that the demand and supply curves are straight lines, the tax reduces producer surplus by how much?

#### What is the industry supply curve

Suppose an industry has 100 firms, each with supply curve P = 50 + 10Q. Furthermore, suppose the market demand curve is given by P = 200 - 0.9Q. What is the industry supply cu

#### Adverse selection or the principal-agent problem

Analyze the situations involving risk below to determine if they involve Moral Hazard (M), Adverse Selection (A), or the Principal-Agent Problem (P). For Moral Hazard write “M

#### The money supply-interest rates and aggregate demand

Suppose that you are a member of the Board of Governors of the Federal Reserve System. The economy is experiencing a sharp and prolonged inflationary trend. Explain in each ca

#### Firm marginal revenue at the current price and quantity

A firms demand curve is given by P = 500 -2q, the direct Q = 250 - 1/2P. The firm's current price is \$300 and the firm sells 100 units of output per week. Calculate the firm's

#### Firm using the right balance of capital and labor

The marginal product of labor is 10 and the marginal product of capital is 20. If the wage rate is \$10 and the price of capital is \$5, is the firm using the right balance of c

#### Determine the pure strategy nash equilibria

For the following situation, come up with a game (in normal form – the matrix representation we have been using) to describe the situation. Determine the pure strategy Nash eq

#### Generally able to charge higher price

A neighborhood convenience store is generally able to charge a higher price for its candy bars than the town’s Wal-Mart Super Center because the convenience store:

#### What has happened to consumer surplus in the market

Apex Manufacturing charges Zenith Manufacturing with predatory pricing (that is, selling below cost) What do you think anti-trust authorities will want to consider before they