M Module Homework x G Given the following diag C ezto.mheducation.com/hm.tpx ADV
ID: 1214980 • Letter: M
Question
M Module Homework x G Given the following diag C ezto.mheducation.com/hm.tpx ADVANCED ANALYSIS Given the following diagrams: Q1- 20 bags. Q2 15 bags. Q3 27 bags. The market equilibrium price is $70 per bag. The price at point a is $110 per bag. The price at point c is $10 per bag. The price at point d is $80 per bag. The price at point e is S55 per bag. The price at point f is $91 per bag. The price at point g is S56 per bag. Apply the formula for the area of a triangle (Area x Base x Height) to answer the following questions. (a) (b) Efficiency loss from underproduction Efficiency loss from overproduction Quantity (bags) Quantity (bags) Instructions: Round your answers to 1 decimal place. a. What is the dollar value of the total surplus (producer surplus plus consumer surplus) when the allocatively efficient output level Q1 is being produced? A00 How large is the dollar value of the consumer surplus at the output level Q1? b. what is the dollar value of the deadweight loss when output level Q2 is being produced? s What is the total surplus when output level Q2 is being produced? S c. What is the dollar value of the deadweight loss when output level Q3 is produced? S What is the dollar value of the total surplus when output level Q3 is produced? References k & Resources Internet Explorer 6.17 PM 5/21/2016Explanation / Answer
a.Total Surplus=Consumer Surplus+Producer Surplus
=Area of trianle abc
=(20)(110-10)
=20*100
=2000
Consumer Surplus=0.5(20)(110-10)
=1000
b.
Deadweightloss=Area of triangle dbe
=(Q1-Q2)(LENGTH OF de)
=(20-15)(180-55)
=5*125
= 625
Surplus=2000-625=1375
c.Deadweight loss=(27-20)(91-56)
=7*35
= 245
Total Surplus=2000-245
=1755
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