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3.1 Use the following diagram to calculate total consumer surplus at a price of $12 and production of 500 thou- sand flu vaccinations per day. For the same equilib- rium, calculate total producer surplus. Assuming price remained at $12 but production was cut to 200 thousand vaccinations sper day, calculate producer surplus and consumer surplus. Calculate the deadweight loss from underproduction. 16 8. 4. D. 0. 100 200 300 400 500 600 700 800 900 Thousands of vaccinations per day 24 20 12 Price per vaccination ($)

3.1 Use the following diagram to calculate total consumer surplus at a price of $12 and production of 500 thou- sand flu vaccinations per day. For the same equilib- rium, calculate total producer surplus. Assuming price remained at $12 but production was cut to 200 thousand vaccinations sper day, calculate producer surplus and consumer surplus. Calculate the deadweight loss from underproduction. 16 8. 4. D. 0. 100 200 300 400 500 600 700 800 900 Thousands of vaccinations per day 24 20 12 Price per vaccination ($)

Principles of Microeconomics
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Consumers, Producers, And The Efficiency Of Markets
Section: Chapter Questions
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Use the following diagram to calculate total consumer surplus at a price of $12 and production of 500 thousand flu vaccinations per day. for the same equilibrium, calculate total producer surplus. Assuming price remained at $12 but production was cut to 200 thousand vaccinations per day, calculate producer surplus and consumer surplus. Calculate the deadweight loss from underproduction.

**3.1 Instructions for Calculation** Use the following diagram to calculate the total consumer surplus at a price of $12 and production of 500,000 flu vaccinations per day. For the same equilibrium, calculate the total producer surplus. Assuming the price remained at $12 but production was cut to 200,000 vaccinations per day, calculate producer surplus and consumer surplus. Calculate the deadweight loss from underproduction. **Graph Explanation** The graph shows the supply and demand curves for flu vaccinations. The x-axis represents the quantity in thousands of vaccinations per day, ranging from 0 to 900. The y-axis represents the price per vaccination in dollars, ranging from $0 to $24. - The demand curve (D) is sloping downwards from the top left to the bottom right, beginning at a price of $24 and intersecting the quantity axis at 900,000 vaccinations. - The supply curve (S) is sloping upwards from the bottom left to the top right. The intersection of the supply and demand curves indicates the market equilibrium. At this point, the equilibrium price and quantity correspond to each other. According to the graph, this equilibrium occurs at a price around $12 and a quantity of 500,000 vaccinations, where both the supply and demand meet.
Transcribed Image Text:**3.1 Instructions for Calculation** Use the following diagram to calculate the total consumer surplus at a price of $12 and production of 500,000 flu vaccinations per day. For the same equilibrium, calculate the total producer surplus. Assuming the price remained at $12 but production was cut to 200,000 vaccinations per day, calculate producer surplus and consumer surplus. Calculate the deadweight loss from underproduction. **Graph Explanation** The graph shows the supply and demand curves for flu vaccinations. The x-axis represents the quantity in thousands of vaccinations per day, ranging from 0 to 900. The y-axis represents the price per vaccination in dollars, ranging from $0 to $24. - The demand curve (D) is sloping downwards from the top left to the bottom right, beginning at a price of $24 and intersecting the quantity axis at 900,000 vaccinations. - The supply curve (S) is sloping upwards from the bottom left to the top right. The intersection of the supply and demand curves indicates the market equilibrium. At this point, the equilibrium price and quantity correspond to each other. According to the graph, this equilibrium occurs at a price around $12 and a quantity of 500,000 vaccinations, where both the supply and demand meet.
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