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The supply and demand for 9-volt batteries are given by QD = 230 - 10P and QS = 30P - 10, where P is the price per four-pack and Q measures the number of four-packs.
a. What are the levels of consumer and producer surplus at the equilibrium price?
b. Suppose that a hurricane causes widespread blackouts, shifting the demand curve for 9-volt batteries outward, with the new demand curve equal to QD = 690 - 10P. If the government sets a price ceiling equal to the pre-hurricane price (the old equilibrium price), what is the level of consumer surplus?
c. If the government did not impose the price ceiling, what would consumer surplus equal? Are consumers better off with the price ceiling?
Agricultural Products
Goods derived from farming and the cultivation of the land, such as crops, livestock, and raw materials.
Marginal Product
The additional output that results from using one more unit of a particular input, keeping all other inputs constant.
Labor-Supply Curve
A graph that shows the relationship between the wages workers receive and the amount of labor they are willing to supply.
Wage Affected
The impact on employees' earnings due to various factors like inflation, demand for labor, or changes in government policy.
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