The consumer surplus and the producer surplus in the market.

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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.A, Problem 7PA

To determine

The consumer surplus and the producer surplus in the market.

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Suppose that the demand for broccoli is given by: Q=1000-5P where Q is quantity per year measured in hundreds of bushels and P is the price in dollars per hundred bushels. The long-run supply curve for broccoli is given by: Q=4P-80 Show that the equilibrium quantity here is Q= 400. At this output, what is the equilibrium price? How much in total is spent on broccoli? What is consumer surplus at this equilibrium? What is producer surplus at this equilibrium? How much in total consumer and producer surplus would be lost if Q= 300 instead of Q= 400? Show how the allocation between suppliers and demanders of the loss of total consumer and producer surplus described in part (b) depends on the price at which broccoli is sold. How would the loss be shared if P= 140? How about if P= 95? What would be the total loss of consumer and producer surplus if Q= 450 rather than Q= 400? Show that the size of this total loss also is independent of the price at which the broccoli is sold. Now suppose the…

A firm's inverse supply for a good is given by p = 4.00 + (4.00 × q). Assuming that there are enough buyers to meet the firm's supply, if the per-unit price increases from p = 18.00 to p = 23.50, what is the firm's change in producer's surplus? (Round to the nearest two decimals if necessary.) 2nd attempt A firm's inverse supply for a good is given by p = 4.00 + (4.00 × q). Assuming that there are enough buyers to meet the firm's supply, if the per-unit price increases from p = 18.00 to p = 23.50, what is the firm's change in producer's surplus? O 19.99 (Round to the nearest two decimals if necessary.) 1st attempt A firm's inverse supply for a good is given by p = 4.00 + (4.00 × q). Assuming that there are enough buyers to meet the firm's supply, if the per-unit price increases from p = 18.00 to p = 23.50, what is the firm's change in producer's surplus? O 15.47 (Round to the nearest two decimals if necessary.)

If the supply function for toasters is Q = 10 + p what is the producer surplus if price is $20. Explain your answer and show it on a diagram.

Answer 2

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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.A, Problem 7PA

To determine

The consumer surplus and the producer surplus in the market.

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.A, Problem 7PA

To determine

The consumer surplus and the producer surplus in the market.

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.A, Problem 7PA

To determine