Consider the market for designer purses. The following graph shows the demand and supply for designer purses before the government imposes any taxes First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer purses in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple poinit (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. Before Tax 150 135 Equilbrium 120 Demand 90 Consumer Surplus Producer Surplus Supply 45 20 4 s 100 120 340 100 160 200 (end ed oal 3d
Consider the market for designer purses. The following graph shows the demand and supply for designer purses before the government imposes any taxes First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer purses in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple poinit (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. Before Tax 150 135 Equilbrium 120 Demand 90 Consumer Surplus Producer Surplus Supply 45 20 4 s 100 120 340 100 160 200 (end ed oal 3d
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
Problem 21P
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