QUESTION 2 The supply and demand functions of a good are given by Ps = 32 + Q? and Рр 3D 140 3 where Ps, PD, Qs and Qp are the price and quantity supplied and demanded, respectively. а) Calculate the producer's surplus and consumer's surplus at the equilibrium point. b) Explain the effect, if any, on producer's surplus if the government imposes a fixed tax on this good (note: no calculation expected).

QUESTION 2 The supply and demand functions of a good are given by Ps = 32 + Q? and Рр 3D 140 3 where Ps, PD, Qs and Qp are the price and quantity supplied and demanded, respectively. а) Calculate the producer's surplus and consumer's surplus at the equilibrium point. b) Explain the effect, if any, on producer's surplus if the government imposes a fixed tax on this good (note: no calculation expected).

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 3.7P

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