Calculate producer and consumer surplus

Assignment Help Business Economics
Reference no: EM131728090

The Chicago City Council is concerned about the high rents being charged to some residents and is contemplating the imposition of a $600 per month rent ceiling on apartments in the city. An economist at UIC estimates the demand and supply curves as: QD = 9200 - 8P and QS = -400 + 4P.

a. Calculate the equilibrium price and quantity that would prevail without the price ceiling. Calculate producer and consumer surplus at this equilibrium (sketch a diagram showing both).

b. What quantity will eventually be available if the rent ceiling is imposed? Calculate any gains or losses in consumer and/or producer surplus.

c. Does the proposed rent ceiling result in net welfare gains? Would you advise the City Council to implement the policy?

Reference no: EM131728090

Questions Cloud

Find the compound interest calculator : Calculating the Number of Periods. Go to www.moneychimp.com and find the "Compound Interest" calculator. You want to buy a Lamborghini Murciélago.
Imperfect information and market behavior : Discuss how imperfect information affects market behavior and possible steps that could be taken to mitigate those affects.
Prevail after the imposition of the tax : What price and quantity would prevail after the imposition of the tax? What portion of the tax would be borne by buyers and sellers respectively?
What interest rate do you have to earn : Calculating Rates of Return. Use the "Return Rate" calculator at www. moneychimp.com to solve the following problem. You still want to buy the Lamborghini.
Calculate producer and consumer surplus : Calculate the equilibrium price and quantity that would prevail without the price ceiling. Calculate producer and consumer surplus at this equilibrium
Examine and evaluate critically the diverse ways : Examine and evaluate critically the diverse ways in which the beliefs and practices have changed across time and space
Explain why control theory is best describe : Give examples that support your this theory. Do this theory still apply today or is it outdated? Explain why. Bout 100 words.
Explain factors that affect vital statistics trends : National Institute of Environmental Health Sciences- Write a 2-page paper that analyze and addresses factors that affect vital statistics and population trends.
How much will you have at the tax rate : Future Values and Taxes. Taxes can greatly affect the future value of your investment. The website at www.fincalc.com has a financial calculator that adjusts.

Reviews

Write a Review

Business Economics Questions & Answers

  Qin the wake of the energy crisis in california many

q.in the wake of the energy crisis in california many electricity generating facilities across the nation are

  Illustrate what potential conflicts of interest could arise

Illustrate what potential conflicts of interest could arise in a management buyout in which the investment bank is also likely to be an investor.

  Who has the same preferences as bill

Who has the same preferences as Bill?. Who has the same indifference curves as Bill? Explain why the answers to (a) and (b) differ.

  Firm in a perfectly competitive situation

Discuss how these characteristics impact the firm in a perfectly competitive situation would decide how much to produce and charge.

  Use the supply and demand” type graph

Health capital decisions: What would happen to desired level of health capital if there is an increase in educational attainment? Please use the “supply and demand” type graph. Make sure to explain the graph and answer fully.

  Common criticism of retail sales and excise taxes

A common criticism of retail sales and excise taxes is:

  Introduction to computing

Research at least three different executive support systems using a web search. Review each, and then answer the following questions: 1. Which ESSs did you review? Include a link to information about it.

  Proposed theory has for food consumption

In the Cutler, Glaeser and Shapiro paper entitled why have Americans become more obese? Name four testable implications that the proposed theory has for food consumption? and any solution for this problem?

  When computing the p-value for a two-tailed hypothesis test

When computing the p-value for a two-tailed hypothesis test, we need to

  Elucidate how the proposed carbon tax for australia

elucidate how the proposed carbon tax for australia would help reduce negative externalities, pollution levels in australia.

  Given there is an overwhelming scientific consensus

Given there is an overwhelming scientific consensus that global warming exists, why do many conservatives (like the Republicans running for President) deny its existence?

  Suspension of international trading and financial activities

Large-scale wars typically bring a suspension of international trading and financial activities. Exchange rates lose much of their relevance under these conditions, but once the war is over governments wishing to fix exchange rates face the problem o..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd