Assume the following values,Q1=20 bags, Q2= 15 bags, Q3= 27 bags. The market equ

Question

Assume the following values,Q1=20 bags, Q2= 15 bags, Q3= 27 bags. The market equilibrium price is $45 per bag. The price as a is $85 per bag. The price at c is $5 per bag. The price at f is $59 per bag. The price at g is $31 per bag. Apply the formula for the area of a triangle (Area= 1/2 x Base x Height ). What is the dollar value of the total surplus ( producer surplus plus consumer surplus) when the allocatively efficent output level is produced based on the consumer surplus at the output level ? What is the dollar value of the deadweight loss when output level Q2 is being produced/ What is the total surplus when output level Q2is being produced? What is the dollar value of the deadweight loss when output level Q3 is produced? What is the total surplus when output level Q3 is produced?

Explanation / Answer

CS=1/2(20-0)(85-45)=400
PS=1/2(20-0)(45-5)=400
TS=PS+CS=800

The efficient outcome is
P=20
Q=45

if u need more clarification please refer this link

http://www.chegg.com/homework-help/questions-and-answers/assume-following-values-figures-54a-54b-q1-20-bags-q2-15-bags-q3-27-bags-market-equilibriu-q1966775

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