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Unformatted text preview: If the price is $6, the quantity supplied is 3 and the quantity demanded is 1. When the price is at $4, quantity supplied and quantity demanded is in equilibrium, they both are 2. b. Consumer Surplus = $4 Producer surplus = $4 Total surplus = $8 c. Total surplus will decrease to $6 d. The total surplus would increase to $10. Ch 8 1. a. see attached page 4. a. The consumers would take most of the burden of the tax. Consumer surplus will decrease much more than producer surplus decreases. b. The producers would take most of the burden. Consumer surplus will not decreases as much as producer surplus decreases. Ch 10 2. a. No. The deadweight loss would be reduced, not increased. b. No. The tax will affect both buyers and sellers no matter what. 3. a. The buyer could save someone or someone elses things from fire. b. see attached c. see attached d....
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- Fall '07