Answered: Mr.A who is the business of selling…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 6PA

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Mr.A who is the business of selling furniture has provided his demand and supply for his
products
During the year 2018
Price $ Demand supply
12 0 36
10 3 30
8 6 24
6 9 18
4 12 12
2 15 6
0 18 0
1.Draw the demand and supply graph and plot the equilibrium price and quantity
2.Find the consumer and producer surplus
3.Comment on below prices on whether it will lead to excess demand or supply
10,4,12,0
4.The Government introduced a tax of 6 $.Show the impact in the graph
5.Calcualte the consumer burden, supplier burden and Government revenue

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

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