101 lecture 7 consumers producers efficiency

Microeconomics Lecture 7

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Consumers, Producers, and the Efficiency of Markets

1. What is the equilibrium price before the tax?

2. What is the equilibrium quantity?

3. If the tax is 40 SAR, what will be the new price?

4. If the tax is 40 SAR, how many pizza would be sold?

5. What will be the total revenue with the new tax?

6. How much tax will the seller pay?

7. How much tax will the buyer pay?

8. How much will the total tax be?

9. How much did the seller earn after paying the tax?

10. Why isn’t the new price 90?

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Microeconomics Lecture 7

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Consumers, Producers, and the Efficiency of Markets

Economic Surplus !

Consumer - Buyer !

Producer - Seller

Value Versus Price

Sellers value less than price

Buyers value more than price

Surplus Value is equal to

the difference between

value and price

Economic Surplus is equal to

seller surplus value plus

buyer surplus

BuyersRiyadh Pizza Market

Buyers

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

Riyadh Pizza Market

Buyers

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

40

Riyadh Pizza Market

Buyers

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

3840

Riyadh Pizza Market

Buyers

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

3638

40

Riyadh Pizza Market

Buyers

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

3436

3840

Riyadh Pizza Market

Buyers

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

3234

3638

40

Riyadh Pizza Market

Buyers

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

3032

3436

3840

Riyadh Pizza Market

Buyers

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2830

3234

3638

40

Riyadh Pizza Market

Buyers

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840

Riyadh Pizza Market

Buyers

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840

Price 29

Riyadh Pizza Market

Buyers

0

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840

Price 29

Riyadh Pizza Market

Buyers

0

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840

Price 29

Riyadh Pizza Market

Buyers

0

5

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840

Price 29

Riyadh Pizza Market

Buyers

0

5

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840

Price 29

Riyadh Pizza Market

Buyers

0

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840

Price 29

Riyadh Pizza Market

Buyers

0

5

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840

Price 29

Riyadh Pizza Market

Buyers

0

5

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840 Price

35

Riyadh Pizza Market

Buyers

0

5

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840 Price

35

Riyadh Pizza Market

Buyers

0

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840 Price

35

Riyadh Pizza Market

Buyers

0

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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki

2628

3032

3436

3840 Price

35

Riyadh Pizza Market

SellersRiyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

Riyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

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Riyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

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Riyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

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Riyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

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Price 29

Riyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

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Price 29

Riyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

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Price 29

Riyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

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Price 35

Riyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

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Price 35

Riyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

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Price 35

Riyadh Pizza Market

Sellers

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Dominos Pizza Hut Dr Gale

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Price 35

Riyadh Pizza Market

Always Two Values in a trade

Always Two Values in a trade

Difference between what I am willing to pay for and the price

Difference between what I am willing to sell for and the price

How many firms does it take for competition?

How many firms does it take for competition?

Only One

As long as they can enter the market