Both subparts explanation correct and in the detail steps 3. The graph below represents the market for lychee nuts. The equilibrium price is $7.00per bushel, but the market price is $5.00perbushel.Price(dollarsper bushel)Supply$7.00C5.00Demand8,00012,000Quantity(bushelsper month)1) Identify the areas representing consumer surplus (CS), producer surplus (PS), anddeadweight loss at the market price of $5.002) Identify the areas répresenting consumer surplus (CS), producer surplus (PS), anddeadweight loss at the equilibrium price of $7.00B.

The equilibrium is established where the demand and supply forces are equal. The deadweight loss is…

Answered: 3. The graph below represents the…

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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Both subparts explanation correct and in the detail steps

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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