Assume the following: Q1=20 bags. Q2=15 bags. Q3=27 bags. The market equilibrium

Question

Assume the following:
Q1=20 bags. Q2=15 bags. Q3=27 bags.
The market equilibrium proce os $45 per bacg. The price at 'a' is $85 pe 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. Apply the formula for the area of a triangle to answer the following questions.
a. What is the dollar value of the total suprlus when the allocatively efficient output level is being produced? How large is the dollar value of the consumer suprlus at that output level?
B. What is the dollar value of the deadweight loss when the output level Q2 is being produced? What is total surplus when output Q2 is being produced?
C. What is the dollar value of the deadweight loss when output level Q3 is produced? What is the dollar value when output level Q3 is produced?

Explanation / Answer

Deadweight loss is 1/2(85-45)(27-20)=140 TS is 1/2(27-15)(85-5)=480 Hope this helps

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