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Assume that the market is free and perfectly competitive. Price equilibrium (1) = 84, Quantity equilibrium (1) = 89. New Price equilibrium (2) = 75.6,
Assume that the market is free and perfectly competitive.
Price equilibrium (1) = 84, Quantity equilibrium (1) = 89.
New Price equilibrium (2) = 75.6, Quantity equilibrium (2) = 97
Equilibrium (1) | New equilibrium (2) | |
Consumer surplus (CS) | 3738.00 | 4523.08 |
Producer surplus (PS) | 2429.70 | 2261.54 |
Total surplus (TS) | 6167.70 | 6784.62 |
Please calculate the change in total surplus (TS) and explain why total surplus changes and what this change represents?
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