MARKET STRUCTURE: LINEAR DEMAND AND LINEAR SUPPLY *

1) In the green cells, type the intercept and slope of the inverse market demand function P = a - bQ and then PRESS ENTER
Intercept (a) 100
Slope (b) 8

2) In the green cell, type the intercept and slope of the inverse market supply function P = c + dQ and then PRESS ENTER
Intercept (c) 50
Slope (d) 2

DEMAND AND SUPPLY EQUILIBRIUM OUTCOME:

Market
Quantity 5.0
Price $60.00
Consumer Surplus $100.00
Producer Surplus $25.00

*
Note: Intercept (a) must be greater than Intercept (c) > 0
hen PRESS ENTER

en PRESS ENTER
MARKET STRUCTURE: LINEAR DEMAND AND LINEAR SUPPLY WITH PRICE CEILING*
1) In the green cells, type the intercept and slope of the inverse market demand function P = a - bQ and then PRESS ENTER
Intercept (a) 100
Slope (b) 8

2) In the green cell, type the intercept and slope of the inverse market supply function P = c + dQ and then PRESS ENTER
Intercept (c) 50
Slope (d) 2

3) In the gree cell, type the price ceiling** 55

DEMAND AND SUPPLY EQUILIBRIUM OUTCOME:

Market
Pre-Ceiling Equilibrium
Quantity 5.0
Price $60.00
Consumer Surplus $100.00
Producer Surplus $25.00
Post-Ceiling Equilibrium
Quantity Demanded 5.625
Quantity Supplied 2.5
Shortage (QD - QS) 3.125
Price $55.00
Full Economic Price $80.00
Consumer Surplus $87.50
Producer Surplus $6.25
Deadweight Loss $31.25

*
Note: Intercept (a) must be greater than Intercept (c)
**
Note: price ceiling must be below the equilibrium price and above Intercept (c)
hen PRESS ENTER

n PRESS ENTER
MARKET STRUCTURE: LINEAR DEMAND AND LINEAR SUPPLY WITH PRICE FLOOR*
1) In the green cells, type the intercept and slope of the inverse market demand function P = a - bQ and then PRESS ENTER
Intercept (a) 100
Slope (b) 8

2) In the green cell, type the intercept and slope of the inverse market supply function P = c + dQ and then PRESS ENTER
Intercept (c) 50
Slope (d) 2

3) In the gree cell, type the price floor** 75

DEMAND AND SUPPLY EQUILIBRIUM OUTCOME:

Market
Pre-Floor Equilibrium
Quantity 5.0
Price $60.00
Consumer Surplus $100.00
Producer Surplus $25.00
Post-Floor Equilibrium
Quantity Demanded 3.125
Quantity Supplied 12.5
Surplus (QS - QD) 9.375
Price $75.00
Consumer Surplus $39.06
Producer Surplus $68.36
Deadweight Loss $17.58

*
Note: Intercept (a) must be greater than Intercept (c) > 0
**
Note: price floor must be above the equilibrium price and below Intercept (a)
hen PRESS ENTER

n PRESS ENTER
MARKET STRUCTURE: COMPARATIVE STATICS FOR LINEAR DEMAND AND LINEAR SUPPLY *
1) In the green cells, type the intercept and slope of the inverse market demand function P = a - bQ and then PRESS ENTER
Initial Demand New Demand
Intercept (a) 100 200
Slope (b) 8 8

2) In the green cell, type the intercept and slope of the inverse market supply function P = c + dQ and then PRESS ENTER

Initial Supply New Supply

Intercept (c) 50 20
Slope (d) 2 2

DEMAND AND SUPPLY EQUILIBRIUM OUTCOME:

Initial Market New Market Change
Quantity 5.0 18.0 13.0
Price $60.00 $56.00 -$4.00
Consumer Surplus $100.00 $1,296.00 $1,196.00
Producer Surplus $25.00 $324.00 $299.00

*
Note: Intercept (a) must be greater than Intercept (c) > 0
PPLY *
then PRESS ENTER

en PRESS ENTER