Hua is willing to pay $4 for a latte and Sandeep is willing to pay $5 for a latt

Question

Hua is willing to pay $4 for a latte and Sandeep is willing to pay $5 for a latte. If the coffee bar charges $4 25 for a latte, what will be the total consumer surplus for these two consumers? 20. If the country of Malawi begins to charge a tariff on toothpaste, what will happen? the price of toothpaste in Malawi will go down toothpaste consumers in Malawi will be better off toothpaste producers in Malawi will be better off toothpaste producers in Malawi will be worse off toothpaste producers in the US will be better off A doughnut shop has fixed costs for its rent and machinery. Its average variable costs increase as output increases because the shop gets more crowded with more employees and it is harder for them to produce doughnuts efficiently Use a picture showing AFC, AVC and ATC to explain the shape of the average total cost curve for the doughnut shop.

Explanation / Answer

19) Hua surplus=0.25

Sandeep surplus= 0.75

Total surplus=1 dollar

20) It is c

21) AFC curve would be a straight line with output on horizontal and price on vertical but parallel to the x-axis

AVC curve would rise but at the profit point would start felling in a U-shape

ATC would be at the intersection point (the second one.)

By,

Nishant Bhatt

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