Microeconomics 20th Edition by McConnell, Sean Flynn, Stanley Brue

Exercise 4

ADVANCED ANALYSIS Assume the followingd values for Figures 5.4a and 5.4b. Q 1 = 20 bags, Q 2 = 15 bags. Q 3 = 27 bags. The market equilibrium price is $45 per bag, The price at a is $85 per bag.The price at c is $5 per bag. The price at f is $59 per bag. The price at g is $31 per bag.Applythe formula for the area ofa triangle (Area = 1/2 × (× Base × Height)to answer the fol lowing questions. LO2
a. what is the dollar value of the total surplus (producer surplus plus consumer surplus)when the allocatively efficient output level is being produced How large is the dollar value of the consumer surplus at that output level
b. 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
c. What is the dollar value of the deadweigh loss when output level Q 3 is produced What is the dollar value of the total surplus when output level Q 3 is produced