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In a competitive market, the market demand curve is Qd = 28 – 2p and the market supply curve is Qs = -8 + 2p.

In this problem, you will investigate how the price affects the producer and consumer surplus and calculate the deadweight loss under the restriction on the quantity traded.

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Problem 6-3
Use a cell reference or a single formula where appropriate in order to receive full cre
In a competitive market, the market demand curve is Q d = 28 – 2p and the market supply
=
=
Qd
Qs
-2 p
28
-8
+
2p
a) Determine the quantity demanded and quantity supplied for p = \$4, 5, 6, … , 14.
b) For prices p = \$4, 5, 6, Ã¢â‚¬Â¦ , 14, determine the consumer surplus.
c) For prices p = \$4, 5, 6,…, 14, determine the producer surplus.
a)
p
\$4
\$5
\$6
\$7
\$8
\$9
\$10
\$11
\$12
\$13
\$14
b)
Qd
Qs
c)
CS
PS
Determine the equilibrium quantity and price.
The equilibrium quantity is
and the equilibrium price is
How does an increase in price affect the consumer surplus?
When the price increases, the consumer surplus
.
How does an increase in price affect the producer surplus?
When the price increases, the producer surplus
.
d) Suppose the government limits the quantity traded in the market to 6 units. Calcu
.
r to receive full credit. Do not copy and paste
swers.
d the market supply curve is Qs = -8 + 2p.
= \$4, 5, 6, … , 14.
us.
.
ket to 6 units. Calculate the resulting deadweight loss.
Project Description:
In this problem, you will investigate how the price affects the producer and consumer surplus and c
Steps to Perform:
Step
1
2
3
4
5
6
7
8
9
10
11
Project Description:
In this problem, you will investigate how the price affects the producer and consumer surplus and calculate
Steps to Perform:
Instructions
Use a cell reference or a single formula where appropriate in order to receive full credit.
Do not copy and paste values or type values, as you will not receive full credit for your
Start
In cellExcel.
D14, by using relative and absolute cell references, calculate the quantity
demanded at the price in cell C14. Copy the formula from cell D14 down the column to
cell D24.
In cell E14, by using relative and absolute cell references, calculate the quantity supplied
at the price in cell C14. Copy the formula from cell E14 down the column to cell E24.
In cell F14, by using relative and absolute cell references, calculate the consumer surplus
at the price in cell C14. Copy the formula from cell F14 down the column to cell F24.
In cell G14, by using relative and absolute cell references, calculate the producer surplus
at the price in cell C14. Copy the formula from cell G14 down the column to cell G24.
In cell F27, by using a cell reference, enter the equilibrium quantity.
In cell J27, by using a cell reference, enter the equilibrium price.
In cell H30, determine how an increase in price affects the consumer surplus.
In cell H33, determine how an increase in price affects the producer surplus.
In cell F36, by using cell references to the corresponding price and quantity values,
calculate the deadweight loss if the government limits the quantity traded to 6 units.
Save the workbook. Close the workbook and then exit Excel. Submit the workbook as
directed.
lus and calculate
Points
Possible
0
1
1
1
1
1
1
1
1
1
0
Excel 2016 Project
Chapter 8 Problem 6-3 (V2)
Project Description:
In this problem, you will investigate how the price affects the producer and consumer surplus and calculate the deadweight
loss under the restriction on the quantity traded.
Steps to Perform:
Points
Possible
Step
Instructions
1
Use a cell reference or a single formula where appropriate in order to receive full credit. Do not
copy and paste values or type values, as you will not receive full credit for your answers.
0
Start Excel.
2
In cell D14, by using relative and absolute cell references, calculate the quantity demanded at
the price in cell C14. Copy the formula from cell D14 down the column to cell D24.
1
3
In cell E14, by using relative and absolute cell references, calculate the quantity supplied at
the price in cell C14. Copy the formula from cell E14 down the column to cell E24.
1
4
In cell F14, by using relative and absolute cell references, calculate the consumer surplus at
the price in cell C14. Copy the formula from cell F14 down the column to cell F24.
1
5
In cell G14, by using relative and absolute cell references, calculate the producer surplus at
the price in cell C14. Copy the formula from cell G14 down the column to cell G24.
1
6
In cell F27, by using a cell reference, enter the equilibrium quantity.
1
7
In cell J27, by using a cell reference, enter the equilibrium price.
1
8
In cell H30, determine how an increase in price affects the consumer surplus.
1
9
In cell H33, determine how an increase in price affects the producer surplus.
1
10
In cell F36, by using cell references to the corresponding price and quantity values, calculate
the deadweight loss if the government limits the quantity traded to 6 units.
1
11
Save the workbook. Close the workbook and then exit Excel. Submit the workbook as
directed.
0
Total Points
Created On: 07/05/2019
1
9
Chapter 8 Problem 6-3 (V2)