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101 10 20 price . 18 .. 16 ... E- .. .. . 10 20 30 40 50 Refer to the figure above, assuming that the demand curves price in
Refer to the figure above, assuming that the demand curves price intercept is at $20 and the supplys intercept is at (0,0).
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Answer #1

1) CS = 0.5*50*(20-10) = 250

PS = 0.5*50*(10-0) = 250

TS= CS+PS = 500

2) Price received by producers = 4

Quantity produced = 20

PS = 0.5*20*(4-0) = 40

3) Price paid by consumers = 4

Quantity consumed = 20

CS = 0.5*20*(20-16) + 20*(16-4) = 40+240 = 280

4) DWL = 0.5*(50-20)*(16-4) = 180

5) The consumers benefits as the equilibrium price decreases and they pay a lower price

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