For questions 6,7 and 8, refer to the graph below. This graph illustrates the supply and demand for the most recent XBOX model in 2016 in Atlanta. Price per Unit Supply 2016 $425 $249 $150 Demand 2016 Quantity of Units Sold 740 1,480 2,100

For questions 6,7 and 8, refer to the graph below. This graph illustrates the supply and demand for the most recent XBOX model in 2016 in Atlanta. Price per Unit Supply 2016 $425 $249 $150 Demand 2016 Quantity of Units Sold 740 1,480 2,100

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 2E

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Question

At Price of $425 per XBOX unit, we would see:
a
excess supply
b
excess demand
c
consumer surplus
d
neither excess demand and excess supply.

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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