Week 6 Homework XXXXXXXXXXECO 105 XXXXXXXXXXDue date: 5/7/20211) In the following market, a)...

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Week 6 Homework XXXXXXXXXXECO 105 XXXXXXXXXXDue date: 5/7/2021
1) In the following market,
a) Calculate consumer surplus and producer surplus at the equili
ium.
) Calculate the consumer surplus if the price increases to $18
c) When the price increases to $18, what part of the fall in consumer surplus is due to
i) Some consumers leave the market.
ii) The remaining consumers buy the product at a higher price.

week-6-homework-bxlw13ow.docx

Komalavalli · Accepted Answer

Week 6 Homework                     ECO 105                      Due date: 5/7/2021
1) In the following market, 
a) Calculate consumer surplus and producer surplus at the equilibrium.
b) Calculate the consumer surplus if the price increases to $18
c) When the price increases to $18, what part of the fall in consumer surplus is due to
i) Some consumers leave the market. 
ii) The remaining consumers buy the product at a higher price. 
    
a)
Consumer surplus = ½*(22-16)*(6-0)
Consumer surplus = ½*(6)(6)
Consumer surplus = 18
Producer surplus = ½*(16-4)*(6-0)
Producer surplus = ½*(12)*(6)
Producer surplus = 36
Therefore producer surplus is 36 and consumer surplus is 18 at equilibrium.

Week 6 Homework XXXXXXXXXXECO 105 XXXXXXXXXXDue date: 5/7/2021 1) In the following market, a) Calculate consumer surplus and producer surplus at the equilibrium. b) Calculate the consumer surplus if...

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