QUESTION 2 The supply and demand functions of a good are given by Ps =32 +...

QUESTION 2

The supply and demand functions of a good are given by

Ps =32 + Q²_S

and

P_D= 140 - Q²_D/3

where ?P_S , ?P_D, ?Q_S and QD are the price and quantity supplied and demanded, respectively.

a) Calculate the producer’s surplus and consumer’s surplus at the equilibrium point.

b) Explain the effect, if any, on consumer’s surplus if the government imposes a fixed tax on this good (note: no calculation expected).

Expert Solution

Rahul Sunny answered 2 years ago

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