consumer surplus and producer surplus
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Show the consumer surplus. Show the producer surplus.
Suppose that a price ceiling of $12 was imposed. How would this change the consumer and producer surplus? Suppose a price floor of $16 was imposed. How would this change the consumer and producer surplus?
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Solution Summary
The consumer and producer surpluses are presented. How the change in the consumer and producer surplus are determined is given.
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For diagrams, look at the attached files.
Initially, equilibrium price = $14 and quantity = 15 units.
CS = 1/2 x 6 x 15 =45
PS = 1/2 x 6 x 15 =45
[to find point D in ss curve,look ...
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