Question

(Advanced Analysis) Given the following diagrams: Q1 = 25 bags. Q2 = 20 bags. Q3 = 32 bags. The market equilibrium price point b is $60 per bag.

The price at point a is $110 and the price at point c is $10 per bag. The price at point d is $70 and the price at point e is $50 per bag. The price at point f is $74and the price at point g is $46 per bag.

Apply the formula for the area of a triangle (Area = ½ × Base × Height) to answer the following questions. I need assistance with this question. Thank you.

Answer 1

a. Total surplus at Qi Total surplus can be calculated as follows Total surplus x(ac)xQi ×(110-10)×25 -1,250 Hence, total surplus is S1,250 Consumer surplus at Qi Consumer surplus can be calculated as follows: Consumer surplus-x(a-equilibrium price): Q1 (110-35)x25 938

Hence, consumer surplus is $938 b. Deadweight loss at Q2 Deadweight loss can be calculated as follows Deadweight loss surplus-kd-e)-(Q-Q2) x(50-30) x25-20 - 50 Hence, deadweight loss is S50.

Total surplus at Q2 Total surplus can be calculated as follows: Total surplus =(2x(a-c)-Q)-(3x(d-e)x(Q1-Q2) (2x(110-10) (25)-ト(50-30-25-20) =|-x(110-10):25 |--|-x(50-30):25-20 = 1.200 Hence, total surplus at q2 is S1,200 c. Deadweight loss at Q3 Deadweight loss can be calculated as follows: Deadweight loss surplus-(fg)x(-2 =-x(42-14)x(32-25) = 98

Hence, deadweight loss at Q3 is S98. Total surplus at Q31 Total surplus can be calculated as follows: T otal surplus = 1-x( a-c Q, |-|-x(f_g)x(Q-Q) -|-x(110-10)×25 |-|-x(42-14)×(32-25) -1,152 Hence, total surplus at Qs is $1,152