Calculate the consumer surplus at the equilibrium

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Reference no: EM131072603

The demand for ice cream is given by P = 24-Q and the supply curve by P = 4.

(a) Illustrate the market equilibrium, and compute the equilibrium price and quantity.

(b) Calculate the consumer surplus at the equilibrium.

(c) As a result of higher milk prices to dairy farmers the supply conditions change to P = 6. Compute the new quantity traded, and calculate the loss in consumer surplus.

Reference no: EM131072603

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