Consider the price support and the quota, CalculateThe consumer surplusThe producer surplusThe deadweight loss 41% A2,83Worksheet (25%)Ouestion 6market has a demand function given by the equation Qd-M0-29 and a supply fonction given by the equation Os-15 P The market is goverrement regulated with a priceupport per unit and production quotas (NOTE A productionquota is a restriction on the quantity of the good that can beproduced Fiirms are not allowed to produce more than thequota)(4)f the price is set at $72 per unit, what production quota isneeded to make sure there are no shortages or surpluses?HINT Sketch the supply and demand equationsAmswerAntrer

Answered: Consider the price support and the…

Business

Economics

Consider the price support and the quota, Calculate The consumer surplus The producer surplus The deadweight loss

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

Consider the price support and the quota, Calculate

The consumer surplus

The producer surplus

The deadweight loss

41% A
2,83
Worksheet (25%)
Ouestion 6
market has a demand function given by the equation Qd-
M0-29 and a supply fonction given by the equation Os-
15 P The market is goverrement regulated with a price
upport per unit and production quotas (NOTE A production
quota is a restriction on the quantity of the good that can be
produced Fiirms are not allowed to produce more than the
quota)
(4)f the price is set at $72 per unit, what production quota is
needed to make sure there are no shortages or surpluses?
HINT Sketch the supply and demand equations
Amswer
Antrer

Definition Definition Producer’s gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price and up to the equilibrium quantity.

Expert Solution

Step 1

The consumer surplus

The producer surplus

The deadweight loss

Solving all parts

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