This Forum has been archived there is no more new posts or threads ... use this link to report any abusive content
==> Report abusive content in this page <==
Post Reply 
 
Thread Rating:
  • 0 Votes - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
economics.A benevolent social planner discovers a market?
10-12-2012, 10:25 PM
Post: #1
economics.A benevolent social planner discovers a market?
A benevolent social planner discovers a market in which supply and demand are determining equilibrium price and quantity. On a diagram of this market, indicate the reduction in total surplus that would occur if the planner decides to reduce production of the good. Explain in words. On another diagram, indicate the reduction in total surplus that would occur if the planner decided to increase production of the good. Explain.

Ads

Find all posts by this user
Quote this message in a reply
10-12-2012, 10:33 PM
Post: #2
 
In first case supply curve shifts left, thus reducing area below demand curve and above supply curve.
Second diagram might be related to too high external costs, or specific case with uncommon supply curve.

Ads

Find all posts by this user
Quote this message in a reply
Post Reply 


Forum Jump:


User(s) browsing this thread: 1 Guest(s)