Question

Skipped F WE--- According to the graph shown, if the market goes from equilibrium to having its price set at $10 then: Multiple Choice consumer surplus will decrease from (A + B + C) to (B+C) only. consumer surplus will increase from (A + B + C) to A only. o ooo O consumer surplus (B+C) will transfer to producers. consumer surplus will decrease by (B+C).

Answer 1

12.Ans: consumer surplus decreases by ( B + C)

Explanation:

At equilibrium price, Consumer surplus = A + B + C

At new price $10 , New consumer surplus = A

So decrease in consumer surplus by = ( A + B + C ) - A =  B + C

13.Ans: consumer surplus is $40

Explanation:

Consumer surplus = 1/2 ( height * base) = 1/2{ ( $14 - $10 ) * 20 } = 1/2 ( $4 * 20) = 1/2 * $80 =$40

24.Ans: some surplus is transferred from producer to consumer.

Explanation:

Areas of C + D+ F + G from producer's surplus are transfered to consumer.

26.Ans: E

28.Ans: A

31.Ans: $10

Explanation:

Tax per unit = After tax market price - After tax price received by the seller

= $ 16 - $6

= $10