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(dollars per gallon) Production …quota – ES 10 20 0 e 30 40 50 60 Quantity…
(dollars per gallon) Production …quota – ES 10 20 0 e 30 40 50 60 Quantity (thousands of gallo S 4) Based on the figure above, a. What is the free-market equilibrium price? b. What is the price after the government starts implementing the production quota? c. What is the consumer surplus after the production quota? d. Calculate the change in the total producer surplus after the production quota, and based on your finding, explain if the producers are better off or worse off as a result of this quota?
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