Suppose now that the government decides to increase the number of quotas available to 72 units, but it keeps the price support at the current level of $72. (HINT: Sketch the supply and demand equations.) d) Calculate (1) the consumer surplus, (1) the producer surplus, (iii) deadweight loss (use

Suppose now that the government decides to increase the number of quotas available to 72 units, but it keeps the price support at the current level of $72. (HINT: Sketch the supply and demand equations.) d) Calculate (1) the consumer surplus, (1) the producer surplus, (iii) deadweight loss (use

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose now that the government decides to increase the number of quotas available to 72 units, but it keeps the
price support at the current level of $72.
(HINT: Sketch the supply and demand equations.)
d) Calculate
(i) the consumer surplus,
(ii) the producer surplus,
(iii) deadweight loss (use 2 decimal places),
(e) Which of the two options would the producers prefer?
(f) Which of the two options would be preferred by society?
Please answer all parts of the question.
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