Consider the following graph: p² Po à p" > O Q1 C m 8 99. Q2 D Consider now a Price Support Program. Discuss how this program has changed Consumer Surplus (CS), Producer Surplus PS and Aggregate Surplus (AS) relative to the Voluntary Production Reduction program. A positive sign shows positive change whereas a negative sign shows a decrease. The symbol -A stands for "change". Acs - +A; APS +(B+C+D+E+G); AAS+(A+B+D-F) Acs 0; APS= 0; AAS- -P Acs-(B+C); APS= -(B+C+G); AAS (F+C+E) Acs +(B+D); APS - +A; AAS- +(A+B+D)

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter4: Markets In Action
Section: Chapter Questions
Problem 1SQP
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Mj

Consider the following graph:
P²
à
Po
p"
A
B
1
O
Q1
Acs=-(
C
E
Consider now a Price Support Program. Discuss how this program has changed Consumer
Surplus (CS), Producer Surplus PS and Aggregate Surplus (AS) relative to the Voluntary
Production Reduction program. A positive sign shows positive change whereas a negative
sign shows a decrease. The symbol -A stands for "change".
-
Q2
Acs +A; APS +(B+C+D+E+G); AAS +(A+B+D-F)
Acs= 0; APS = 0; AAS-F
D
- (B+C); APS = -(B+C+G); AAS = -(F+C+E)
W
Acs +(B+D); APS+A; AAS +(A+B+D)
Transcribed Image Text:Consider the following graph: P² à Po p" A B 1 O Q1 Acs=-( C E Consider now a Price Support Program. Discuss how this program has changed Consumer Surplus (CS), Producer Surplus PS and Aggregate Surplus (AS) relative to the Voluntary Production Reduction program. A positive sign shows positive change whereas a negative sign shows a decrease. The symbol -A stands for "change". - Q2 Acs +A; APS +(B+C+D+E+G); AAS +(A+B+D-F) Acs= 0; APS = 0; AAS-F D - (B+C); APS = -(B+C+G); AAS = -(F+C+E) W Acs +(B+D); APS+A; AAS +(A+B+D)
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