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Question: the supply and demand functions of a good are given...

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The supply and demand functions of a good are given by

 

PS = 32 + QS2   and PD= 140 - QD23                ( the 2 and S in the first equation are meant to be right under each and the 2 and D in the second equation is meant to be write under each other)

 

where PS, PD, QS and QD are the price and quantity supplied and demanded, respectively.

 

a)         Calculate the producer’s surplus and consumer surplus at the equilibrium point.

 

b)         Explain the effect, if any, on consumer’s surplus if the government imposes a fixed tax on this good (note: no calculation expected).

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