Explore BrainMass
Share

Distribution of costs and benefits

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

(See attached file for full problem description with diagram)

---
15. (Distribution of Costs and Benefits) Suppose that the government decides to guarantee an above-market price for a good by buying up any surplus at that above-market price. Using a conventional supply-demand diagram, illustrate the following gains and

a. The loss of consumer surplus
b. The gain of producer surplus in the short run
c. The cost of running the government program (assuming no storage costs)
What is the total cost of the program to consumers? Are the costs and benefits of the support program widespread or concentrated?
---

© BrainMass Inc. brainmass.com December 19, 2018, 9:13 pm ad1c9bdddf
https://brainmass.com/economics/general-equilibrium/distribution-of-costs-and-benefits-53723

Attachments

Solution Summary

The solution answers the question(s) below.

$2.19