In another market, suppose that the demand and supply are represented by: qd = 400P-2 and...

In another market, suppose that the demand and supply are represented by: q_d = 400P^-2 and qS = 0.5P.

(a) Calculate the consumer surplus at market equilibrium.

(b) Suppose that now the government imposes tax at producer, in which producer must pay 5 units for every goods sold. How much is the reduction on consumer surplus?

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Expert Solution

Rahul Sunny answered 1 year ago

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