Question 1 Suppose the demand and supply for eggs in a small economy are given by: QD=100-20P Qs=-20+40P Where, Qo and Qs are in thousand dozen of eggs and P is the price per dozen of eggs. a. b. C. Find the consumer surplus, producer surplus and total surplus at the market equilibrium. Draw a well-labeled figure to illustrate the surpluses. Find the total surplus if only 50 thousand dozen eggs are produced and sold. Indicate the area of total surplus in a figure. Find the total surplus if 80 thousand dozen eggs are produced and sold. Indicate the area of total surplus in a figure. Suppose eggs can be imported to the domestic egg market and domestic consumers can buy any amount at $1.5 per dozen. d. e. Comparing to part a, compute the change in consumer surplus. For the change in consumer surplus in d, compute the change in consumer surplus for new consumers and the change in consumer surplus to initial consumers.

Question 1 Suppose the demand and supply for eggs in a small economy are given by: QD=100-20P Qs=-20+40P Where, Qo and Qs are in thousand dozen of eggs and P is the price per dozen of eggs. a. b. C. Find the consumer surplus, producer surplus and total surplus at the market equilibrium. Draw a well-labeled figure to illustrate the surpluses. Find the total surplus if only 50 thousand dozen eggs are produced and sold. Indicate the area of total surplus in a figure. Find the total surplus if 80 thousand dozen eggs are produced and sold. Indicate the area of total surplus in a figure. Suppose eggs can be imported to the domestic egg market and domestic consumers can buy any amount at $1.5 per dozen. d. e. Comparing to part a, compute the change in consumer surplus. For the change in consumer surplus in d, compute the change in consumer surplus for new consumers and the change in consumer surplus to initial consumers.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 4PA

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