Use the following information: The table shows the demand and supply schedules for sandbags before and during
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Question:
Use the following information:
The table shows the demand and supply schedules for sandbags before and during a major flood. During the flood, suppose that the government gave all families an equal quantity of sandbags. Resale of sandbags is not permitted.
Requirements:
1. How would total surplus and the price of a sandbag change?
2. Would the outcome be more efficient than if the government took no action? Explain
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