Suppose that due to the reduced use of a local highway, the local government would reduce...

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Suppose that due to the reduced use of a local highway, the local government would reduce its purchases of concrete. As a result, there is a reduction in the quantity of concrete supplied from 5 million to 4 million cubic meters per year. The reduction in the concrete produced will drive the concrete price down from $4 per cubic meter to $3.5 per cubic meter. In addition, the elasticity of demand in the concrete market at the new equilibrium is -0.25. (round to 2 decimal places where applicable). P ($) 4 3.5 D' 4 5 S Million cubic meters a) From the perspective of concrete producers, calculate the change in the producer surplus (Hint: area $4be $3.5) and report whether it is a gain or a loss. (2 marks) b) Calculate the change in the consumer surplus (Hint: area $4ae'$3.5) and report whether it is a gain or a loss. c) Calculate the change in the social surplus and report whether it is a gain or a loss. (4 marks) Suppose that due to the reduced use of a local highway, the local government would reduce its purchases of concrete. As a result, there is a reduction in the quantity of concrete supplied from 5 million to 4 million cubic meters per year. The reduction in the concrete produced will drive the concrete price down from $4 per cubic meter to $3.5 per cubic meter. In addition, the elasticity of demand in the concrete market at the new equilibrium is -0.25. (round to 2 decimal places where applicable). P ($) 4 3.5 D' 4 5 S Million cubic meters a) From the perspective of concrete producers, calculate the change in the producer surplus (Hint: area $4be $3.5) and report whether it is a gain or a loss. (2 marks) b) Calculate the change in the consumer surplus (Hint: area $4ae'$3.5) and report whether it is a gain or a loss. c) Calculate the change in the social surplus and report whether it is a gain or a loss. (4 marks)