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3. The demand curve and the income compensated demand curve for Bridgestone tires are presented below. Assume that the second demand curve estimated in problem
3. The demand curve and the income compensated demand curve for Bridgestone tires are presented below. Assume that the second demand curve estimated in problem 3 is correct. We are currently at price P1. a. Mark both ends of the compensated demand curve / and both ends of the ordinary demand curve D. b. Suppose that Bridgestone raises its price to P2. Color in the true loss of consumer surplus caused by the price increase. p
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