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Question 2: (a) Explain, using diagrams, the concept of community surplus. (10 marks) (b) Given the demand function for
Posted: Fri Jul 01, 2022 8:19 am
by answerhappygod
- Question 2 A Explain Using Diagrams The Concept Of Community Surplus 10 Marks B Given The Demand Function For 1 (47.64 KiB) Viewed 44 times
Question 2: (a) Explain, using diagrams, the concept of community surplus. (10 marks) (b) Given the demand function for hazelnut chocolate: P = 4-Q/2, if the price of hazelnut chocolate increases from £1 to £2, what would be the change in consumer surplus? Sketch the graph and calculate the change in consumer surplus. (10 marks) (c) Suppose the market for flour is in equilibrium at price of £3 per kg and quantity of 3 million per month. The government decided that the free- market price of flour is too low and imposes a price floor of £4 in the flour market. Draw a supply and demand diagram to show the effect of this policy to the flour market. (5 marks)