Show work. This is not an English class, bullet point answers are acceptable so long as I can understand what you are communicating.
economics
Description
Instructions: Show work. This is not an English class, bullet point answers are acceptable so long as I can understand what you are communicating. Late assignments cannot be accepted as we will review the answer to assignments the same class the assignment are due.
Prior to COVID-19, suppose that the average consumer demand for movies was:
(a) [4 marks] Find the equilibrium price P ∗ and quantity Q∗ . Compute the total welfare in this situation (reminder : total welfare = consumer surplus + producer surplue).
(b) [4 marks] Because of the pandemic, Hollywood studies began to reduce the number of movies being made available for release. Suppose that the overall supply
of movies became QS =
1
10
P. At the same time, two things happened to consumers: less money and lower willingness to spend hours in the dark with random
strangers. Suppose this cause the demand to fall to QD = 1.8−
1
10
P. If the movie
theatres continue to try to charge the same price as part (a), then explain what
happens in this market (note: this was what movie theatres initially did)? What
would the new equilbrium be?
Instruction Files
Busn295A1W2021.pdf
121.7 KB
