This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose the market for a good is expressed as follows: Inverse demand: P = 200 - 2Q Inverse ... (Read 229 times)

bobbie

  • Hero Member
  • *****
  • Posts: 592
on: Jul 1, 2018
Suppose the market for a good is expressed as follows:
 
  Inverse demand: P = 200 - 2Q
  Inverse supply: P = 2Q
 
  What is the equilibrium if the government imposes a supply quota of 75 units?
  What is the equilibrium if the government imposes a supply quota of 25 units?

Question 2

A horizontal demand curve for a firm implies that
 
  A) the firm is a monopoly.
  B) the market the firm is operating in is not competitive.
  C) the firm is selling in a competitive market.
  D) the products of that firm are very different from other firms' products.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Jane

  • Sr. Member
  • ****
  • Posts: 309
Reply #1 on: Jul 1, 2018
Answer to Question 1

The market equilibrium with no quota is P = 100 and Q = 50 units. A supply quota of 75 units is not binding so the equilibrium is unchanged. A supply quota of 25 units will change the supply curve. The new supply curve will be the same as the no quota supply curve until 25 units and then it will be vertical. The new equilibrium is P = 150 and Q = 25 units.

Answer to Question 2

C


bobbie

  • Member
  • Posts: 592
Reply 2 on: Jul 1, 2018
Great answer, keep it coming :)

T4T

  • Member
  • Posts: 348
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

Amoebae are the simplest type of protozoans, and are characterized by a feeding and dividing trophozoite stage that moves by temporary extensions called pseudopodia or false feet.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

Green tea is able to stop the scent of garlic or onion from causing bad breath.

Did you know?

Eat fiber! A diet high in fiber can help lower cholesterol levels by as much as 10%.

How to use inverse trigonometric functions to solve a right triangle How to use inverse trigonometric functions to solve a right triangle
Nuts are also a good source of B group vitamins (including folate), and vitamin E Nuts are also a good source of B group vitamins (including folate), and vitamin E
Older Adults Benefit from Good Nutrition and Physical Activity Older adults Older Adults Benefit from Good Nutrition and Physical Activity Older adults
Politics, Power and the Common Good: An Introduction to Political Science, 5/E Politics, Power and the Common Good: An Introduction to Political Science, 5/E
Markets and Institutions Market Story Problem Markets and Institutions Market Story Problem
Iraqi market Iraqi market
Video: Adolescent Diabetes

For a complete list of videos, visit our video library