E) Graph the demand and supply schedule and the effect of the restriction of onl

Question

E) Graph the demand and supply schedule and the effect of the restriction of only 20 lawn mowers sold by the local industry. Is there a deadweight loss from this policy? If that is the case, can you quantify it? 12. Take the linear Demand function q bp and compute the elasticity of demand as well as the price at which the elasticity is -1. (5 points) 13 A profit maximizing competitive firm uses Just one input x. Its production unction is 2. The price of output is 16 and the factor price is 8. The amount of the factor that the firm demand is. (5 points) 8x (a) 10 (b) 22.63 (c) 64 (d) 48 (e) None of the above

Explanation / Answer

now the profit function p(x) is given by

p(x) = 16*8x^1/2- 8x

p'(x) = 0

16*8/2*x^-1/2 = 8

so x^1/2 = 8 and x = 64

so answer is C

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