Eco 70 Instructions: This will count for 60 pts on your final exam. Responses must be submitted prior to receiving the exam on May 13th. The question has multiple portions and each piece builds on the next section. Be prepared to answer this information

Eco 70

 question with picture but cannot be copied here

Instructions: This will count for 60 pts on your final exam. Responses must be submitted prior to receiving the exam on May 13th. The question has multiple portions and each piece builds on the next section. Be prepared to answer this information as you proceed to the next portion. SHOW ALL YOUR WORK! GRAPHS, FORMULAS, MATH, EVERYTHING!

1.) You are given the following supply and demand curve functions for a market for sunglasses.

Graph the following:

• The demand curve;

• The supply curve;
•  
• Consumer surplus
• Producer surplus;
• Total surplus;
• The equilibrium price and quantity; and,
• Total revenue for this market.
•  

Using the functions above, the following table is found. Please complete this table.

Please graph the following using the previous table:

• Marginal cost;
• Average total cost;
• Average fixed cost;
• Marginal revenue; and,
•  
• Average variable cost.
•  

2.) If a price ceiling of $100 is imposed, what will happen within this market? Please graph the results and explain.

A: At the $100 ceiling would reduce the demand level and increase the supply level of the sunglasses.

3.) Suppose a consumer report comes out stating that sunglasses will decrease the risk of cataracts by 20 percent if worn during peak sun hours regularly. What may happen in the market for sunglasses? Please draw and explain the change in the graph. Using the previous table, select a new price and quantity supplied. You know Qs = Qd at equilibrium, so if you are looking for:

A:The demand and supply for the sunglasses would increase and so would the price.

QD= -2(P)+408                                                                                    QS=5P-180                 

Price                QS        QD                                                                                      QS

 $10     -2         408      388      $3,880                         $10     5          -180     $(130)

 $50     -2         408      308      $15,400                       $50     5          -180     $70

 $60     -2         408      288      $17,280                       $60     5          -180     $120

 $70     -2         408      268      $18,760                       $70     5          -180     $170

 $80     -2         408      248      $19,840                       $80     5          -180     $220

 $110   -2         408      188      $20,680                       $110   5          -180     $370

 $130   -2         408      148      $19,240                       $130   5          -180     $470

Graph the following:

·         The original supply curve;

·         The original demand curve;

·         The original price at equilibrium;

·         The original quantity at equilibrium;

·         The new demand curve;

·         The new price at equilibrium;

·         The new quantity at equilibrium;

·         The original consumer surplus;

·         The new consumer surplus;

·         The original producer surplus;

·         The new producer surplus;

·         The original total surplus;

·         The new total surplus.

What is the change in total revenue under the new demand?

A:It would shrink the producer and consumer surplus,Total Revenue would increase from $75,600 to $115,080             

4.) What happens if a $7 tax is imposed on sunglasses, find the equation for . Solve for the following items:

·         The price buyer’s pay under the tax;

·         The quantity buyers will purchase at the price under the tax;

·         The price seller’s receive under the tax for that quantity;

·         The new producer surplus under tax;

·         The new consumer surplus under tax;

·         The new tax revenue received;

·         The new total surplus under tax; and,

·         The deadweight loss.

Use the new demand function found in Question 3 to solve as your Qd function. Please be sure to graph everything as well.