ADVANCED ANALYSIS Given the following diagrams Q1 12 bags Q

ADVANCED ANALYSIS Given the following diagrams: Q_1 = 12 bags. Q_2 = 7 bags. Q_3 = 19 bags. The market equilibrium price is $46 per bag. The price at point a is $70 per bag. The price at point c is $10 per bag. The price at point d is $56 per bag. The price at point e is $31 per bag. The price at point f is $67 per bag. The price at point g is $32 per bag. Apply the formula for the area of a triangle (Area = 1/2 x Base x Height) to answer the following questions. What is the dollar value of the total surplus (producer surplus plus consumer surplus) when the allocatively efficient output level Q_1 is being produced? $ How large is the dollar value of the consumer surplus at the output level Q_1? $ What is the dollar value of the deadweight loss when output level Q_2 is being produced? $ What is the total surplus when output level Q_2 is being produced? $ What is the dollar value of the deadweight loss when output level Q_3 is produced? $ What is the dollar value of the to

Solution

(a) $360 (i.e. (70 - 10) * 12/2) and $144 (i.e.(70-46)*12/2)

(b) $62.5 (i.e. 25 *5 /2) and $297.5 (i.e. 360 - 62.5)

(c) $122.5 (i.e. (67-32)*7/2) and $237.5 (i.e. 360 - 122.5)