Question: Question 4. a. Show on a demand supply graph how consumer surplus and producer surplus is dened and provide a brief explanation of why they

Question 4.

a. Show on a demand supply graph how consumer surplus and producer surplus is dened and provide

a brief explanation of why they would be considered as welfare measures

b. In general to evaluate welfare eects we need to consider the welfare of groups of individuals. What

problem does consumer surplus pose in this regard ?

c. Suggest another measure of consumer welfare.

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