1. Return to the cellular phone industry when it was organized as a perfectly competitive industry. We...
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Question:
1. Return to the cellular phone industry when it was organized as a perfectly competitive industry. We will use the information in Practice Problem 2.1 to work out consumer surplus and producer surplus in a competitive equilibrium
- Show that when QC=500 units and PC=$30 per unit then consumer surplus is equal to $22,500 and producer surplus is equal to $5,000. This results in a total surplus equal to $27,500.
- Show that when an output of 275 units is produced in this industry the sum of consumer and producer surplus falls to $21,931.25.
For reference, problem 2.1 will be mentioned below.
Related Book For
Microeconomics
ISBN: 978-0321866349
14th canadian Edition
Authors: Christopher T.S. Ragan, Richard G Lipsey
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