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2 A small town is served by many competing supermarkets which have constant marginal cost. a b Using a diagram of the market for groceries,

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2 A small town is served by many competing supermarkets which have constant marginal cost. a b Using a diagram of the market for groceries, show the consumer surplus, producer surplus and total surplus. Now suppose that the independent supermarkets combine to form one chain. Using a new diagram, show the new consumer surplus, producer surplus and total surplus. Relative to the competitive market, what is the transfer from consumers to producers? What is the deadwelght loss

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