Economic Analysis On Higher Education - Beijing University - Research Paper

505 words - 3 pages

Microeconomics Problem set 3 Due date April 17
1. (5 points) Post 2 questions (and your response) for the final.
2. (8 points) Each firm supplying good X has the cost function of
x10Q2 + 50
There are 4 firms in the market supplying good X.
(a) Given that the market for good X is perfectly competitive, what is the market supply curve for good X?
(b) Find the equilibrium price and quantity of good X.
0(12 points) Suppose you were consulting for a country that is prone to typhoons. The government knows the initial demand for bottled water:
QCurrent supply is given by:
D = 300 − 200p
QS = −100 + 600p
A typhoon hits and the demand for bottled water increases. Supply is not affected by the typhoon. New demand is given by:
0D = 500 − 200p
Q is in gallons per day, p is in dollars per gallon.
(a) Find the old equilibrium price and quantity
(b) Find the new equilibrium price and quantity
(c) Which policy is in the best interest of consumers as a group? Explain your recommendation
i. Setting a price ceiling at the old equilibrium price
ii. Allowing the price to rise to a new equilibrium
−(10 points) The city’s rent control agency has found that aggregate de- mand for rental apartments is QD(P ) = 160 8P . Quantity is measured in tens of thousands of apartments. Price, the average monthly rental rate, is measured in hundreds of dollars. In the short run, the quantity of rental apartments is fixed at QS = ...

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