The Ministry of Tourism in the Republic of Palau estimates that the demand for its scuba diving
Question:
a. Solve for the equilibrium price and quantity.
b. Find the value of the consumer surplus received by divers visiting Palau.
c. Find the value of producer surplus received by dive shops.
d. Suppose that the demand for scuba diving services increases, and that the new demand is given by QD = 7,000 – 20P. Calculate the impact of this change in demand on the values you calculated in parts (a) through (c).
e. Are consumers better off or worse off as a result of the demand increase?
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Related Book For
Microeconomics
ISBN: 9781464146978
1st Edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
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