1.The following table presents the marginal value and marginal cost (MC) for each unit of pants.

UnitMVMC

1866

2516

3329

41711

51212

6914

7717

8628

9532

10041

1. What will be the equilibrium market price and quantity of pants?

1. What is the efficient level of consumer surplus, producer surplus and gains-from-trade?

1. At the efficient point, what is the total amount spent on pants?

1. The government decides to subsidize the price of pants so that demanders can buy as many pairs of pants as they want at a price of $6 per pair of pants.How many pants will people want to buy?What is the total value of the pants that are purchased?What is the total cost if all of the demand is satisfied?What is the resulting gains-from-trade relative to the efficient level?