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Suppose an individual’s inverse demand for fish caught by a commercial fishery is estimated to be P = 10 – 0.4Q, where P is the price of fish (per pound) and Q is the quantity of pounds demanded.
1. Graph inverse demand. Assuming the market price is $6/pound, calculate and label:
(a) Quantity demanded
(b) MWTP by consumers
(c) WTP by consumers,
(d) The total amount paid by consumers, and
(e) Consumer surplus (CS).
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