First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer handbags in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. PRICE (Dollars per handbag) 500 450 400 Demand 350 300 250 200 Before Tax Supply 150 100 50 ° 0 160 320 480 640 800 960 1120 1280 1440 1600 QUANTITY (Handbags) + Equilibrium A Consumer Surplus Producer Surplus ?

First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer handbags in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. PRICE (Dollars per handbag) 500 450 400 Demand 350 300 250 200 Before Tax Supply 150 100 50 ° 0 160 320 480 640 800 960 1120 1280 1440 1600 QUANTITY (Handbags) + Equilibrium A Consumer Surplus Producer Surplus ?

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

First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer handbags in the absence of a tax. Then use the green
point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond
symbol) to shade the area representing total producer surplus (PS) at the equilibrium price.
PRICE (Dollars per handbag)
500
450
400
Demand
350
300
250
200
Before Tax
Supply
150
100
50
0
0
160
320 480 640 800 960 1120 1280 1440 1600
QUANTITY (Handbags)
+
Equilibrium
Consumer Surplus
Producer Surplus
?

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