Question
Suppose that the market for a children's book is given by the following demand and supply functions: Demand: QD= 98 - 4P Supply: QS= -4
Suppose that the market for a children's book is given by the following demand and supply functions:
Demand:QD= 98 - 4P
Supply:QS= -4 + 2P
1.Where: QDand QSarequantity demand andquantity supplied respectively, and P is the price.
At the market equilibrium price, consumer surplus is equal to $ __________
2.Where: QDand QSarequantity demand andquantity supplied respectively, and P is the price.
At the market equilibrium price, producer surplus is equal to $ ___________
3.Where: QDand QSarequantity demand andquantity supplied respectively, and P is the price.
At the market equilibrium price, total surplus is equal to $ _______________
4.Now suppose that, in an attempt to support the book publisher, a minimum price per book (price floor) is set at $23. With the price floor in place, the new consumer surplus is equal to $ _______________
5.Now suppose that, in an attempt to support the book publisher, a minimum price per book (price floor) is set at $23. With the price floor in place, thenew totalsurplus is equal to $ ____________
6.Now suppose that, in an attempt to support the book publisher, a minimum price per book (price floor) is set at $23. The efficiency loss (deadweight loss) resulting from the price floor is equal to $ ____
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