EC120 Study Guide - Quiz Guide: Economic Surplus, Perfect Competition, Price Floor

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EC120 Full Course Notes
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A rancher can produce only hamburgers, while a farmer can product only french fries. They could gain from trade because each would enjoy a greater variety of food. Suppose roses are currently selling for per dozen. The equilibrium price of roses is per dozen. A surplus to exist and the market price of roses to decrease. When the price of bubble gum is sh. 50, the quantity demanded is 400 packs per day. When the price falls to sh. 40, the quantity demanded increases to 600. Sellers of corn, recognizing that the price floor is good for them, have pressured policymakers into enacting the price floor. In a particular market, there are 500 firms. Each firm has a marginal cost of when it produces 200 units of output. Quantity = 10 000, price = . Consider a competitive market with a large number of identical firms.

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