The equilibrium price and quantity and the price floor quantity.

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Answer 1

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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.

Chapter 4, Problem 4.3.7PA

Sub part (a):

To determine

The equilibrium price and quantity and the price floor quantity.

Sub part (b):

To determine

The economic surplus with and without price floor.

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Using a graph showing the concepts of producer and consumer surplus, discuss the argument ‘it would have been more efficient if supermarkets had increased the price of toilet paper in early 2020.’ Would raising the price of toilet paper have been unfair?

Using the following diagram (the equilibrium quantity is 5.5, the supply curve intersects the price axis at 3.5), answer these questions: a) If a tax of $2 were imposed, what price would buyers pay, and what price would suppliers receive? How much revenue would be raised by the tax? Compute the total consumer surplus, producer surplus, and welfare after the introduction of the tax. b) If a subsidy of $5 were imposed, what price would buyers pay, and what price would suppliers receive? How much would the subsidy cost the government? What would be the consumer surplus and the producer surplus? c) If the government imposed a binding price floor of $7 and compensated the producers by buying the excess surplus at the stated price: What would be the consumer surplus, the producer surplus, the government expenditures, and total welfare?

Show all work please thanks D.) Now, according to this graph, how much is the consumer surplus when price is set below the equilibrium level at P=$5? (Use the area of a triangle and the area of a rectangle, length x length) E.) According to this graph, how much is the producer surplus when price is equal at P= $5? (use the area of triangle: Base x Height x 1⁄2) F.)In the graph, how much is deadweight loss at a price of $5? (use the area of a triangle) please show calculations so I know how to arrive at those numbers! Thank you

Answer 2

Question

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.

Chapter 4, Problem 4.3.7PA

Sub part (a):

To determine

The equilibrium price and quantity and the price floor quantity.

Sub part (b):

To determine

The economic surplus with and without price floor.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

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.

Chapter 4, Problem 4.3.7PA

Sub part (a):

To determine

The equilibrium price and quantity and the price floor quantity.

Sub part (b):

To determine

The economic surplus with and without price floor.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

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.

Chapter 4, Problem 4.3.7PA

Sub part (a):

To determine