Supply and demand curves are shown in the figure below. A price of $4 is artificially imposed. p($/unit) 10 S 8 6 4 2 D q (quantity) 50 100 150 200 250 (a) At the $4 price, estimate the consumer surplus, the producer surplus, and the total gains from trade. Consumer surplus Producer surplus Total gains from trade = Mi Mi i (b) Compare your answers to the values of consumer surplus, producer surplus, and total gains from trade at the equilibrium price.
Supply and demand curves are shown in the figure below. A price of $4 is artificially imposed. p($/unit) 10 S 8 6 4 2 D q (quantity) 50 100 150 200 250 (a) At the $4 price, estimate the consumer surplus, the producer surplus, and the total gains from trade. Consumer surplus Producer surplus Total gains from trade = Mi Mi i (b) Compare your answers to the values of consumer surplus, producer surplus, and total gains from trade at the equilibrium price.
Chapter3: Market Demand And Supply
Section3.A: Consumer Surplus, Proudcer Suplus, And Market Efficency
Problem 3SQP
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Transcribed Image Text:Supply and demand curves are shown in the figure below. A price of $4 is artificially imposed.
p($/unit)
10
S
8
6
4
2
D
q (quantity)
50 100 150 200 250
(a) At the $4 price, estimate the consumer surplus, the producer surplus, and the total gains from trade.
Consumer surplus
Producer surplus
Total gains from trade =
Mi
Mi
i
(b) Compare your answers to the values of consumer surplus, producer surplus, and total gains from trade at the equilibrium price.
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