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Essentials of Economics 7th Edition by Gregory Mankiw
Edition 7ISBN: 978-1285165950Essentials of Economics 7th Edition by Gregory Mankiw
Edition 7ISBN: 978-1285165950 Exercise 6
Consider a market in which Bert from Problem 3 is the buyer and Ernie from Problem 4 is the seller.
a. Use Ernie's supply schedule and Bert's demand schedule to find the quantity sup-plied and quantity demanded at prices of $2, $4, and $6. Which of these prices brings sup-ply and demand into equilibrium?
b. What are consumer surplus, producer sur-plus, and total surplus in this equilibrium?
c. If Ernie produced and Bert consumed one fewer bottle of water, what would happen to total surplus?
d. If Ernie produced and Bert consumed one additional bottle of water, what would hap-pen to total surplus?
a. Use Ernie's supply schedule and Bert's demand schedule to find the quantity sup-plied and quantity demanded at prices of $2, $4, and $6. Which of these prices brings sup-ply and demand into equilibrium?
b. What are consumer surplus, producer sur-plus, and total surplus in this equilibrium?
c. If Ernie produced and Bert consumed one fewer bottle of water, what would happen to total surplus?
d. If Ernie produced and Bert consumed one additional bottle of water, what would hap-pen to total surplus?
Explanation
Verified
Verified
From the above table we can see that the...
Essentials of Economics 7th Edition by Gregory Mankiw
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