3. The graph below represents the market for lychee nuts. The equilibrium price is $7.00 per bushel, but the market price is $5.00 per bushel. Price
3. The graph below represents the market for lychee nuts. The equilibrium price is $7.00 per bushel, but the market price is $5.00 per bushel. Price
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:3. The graph below represents the market for lychee nuts. The equilibrium price is $7.00
per bushel, but the market price is $5.00
per
bushel.
Price
(dollars
per bushel)
Supply
$7.00
C
5.00
Demand
8,000
12,000
Quantity
(bushels
per month)
1) Identify the areas representing consumer surplus (CS), producer surplus (PS), and
deadweight loss at the market price of $5.00
2) Identify the areas répresenting consumer surplus (CS), producer surplus (PS), and
deadweight loss at the equilibrium price of $7.00
B.
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