The accompanying diagram represents the market for violins. Suppose that a new technology allows beginner-level violin...

 

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The accompanying diagram represents the market for violins. Suppose that a new technology allows beginner-level violin producers to make violins at a substantially lower (marginal) cost while retaining the same quality. a. Use the graph to illustrate the effect that this will have on the supply and demand of beginner-level violins and then answer the following three questions. I b. How much does this new technology increase consumer surplus? Increase in consumer surplus: $ 1050 c. How much does this new technology increase producer surplus? Increase in producer surplus: S 1050 300 270 240 210 150 150 120 190 00 30 0 0 10 Market for Violins 20 30 40 50 60 70 Quantity of violins (in thousands) D 80 90 100 d. How much does this new technology increase total (or social) surplus? Increase in total surplus: $ 2100 The accompanying diagram represents the market for violins. Suppose that a new technology allows beginner-level violin producers to make violins at a substantially lower (marginal) cost while retaining the same quality. a. Use the graph to illustrate the effect that this will have on the supply and demand of beginner-level violins and then answer the following three questions. I b. How much does this new technology increase consumer surplus? Increase in consumer surplus: $ 1050 c. How much does this new technology increase producer surplus? Increase in producer surplus: S 1050 300 270 240 210 150 150 120 190 00 30 0 0 10 Market for Violins 20 30 40 50 60 70 Quantity of violins (in thousands) D 80 90 100 d. How much does this new technology increase total (or social) surplus? Increase in total surplus: $ 2100