.Calculate the consumer surplus under each of the two policies. b. Calculate the producer surplus under each of the two policies. c.calculate the social surplus under each of the policies and recommend the preferred policy. Why?
The supply of and
S: Quantity Supplied = -7.37 + 76.92 *
D: Quantity Demanded = 554.43 – 65.35 * Price
Tip1: convert to inverse demand and inverse supply.
The regulator considers 2 separate policies aimed to increase the consumption of tomatoes by the consumers:
Policy (1): Subsidy to the producers of $1/ton produced.
Policy (2): Advertisement campaign for tomatoes that results in an increase of $1.0 in the intercept of the demand function of the consumers. Tip 2: policy moves the demand function up by $1.0.
a.Calculate the
b. Calculate the
c.calculate the social surplus under each of the policies and recommend the preferred policy. Why?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
