Consumer surplus, Marketing Management

Initially supply falls as goods may be destroyed. As the disaster strikes, the demand also rises in anticipation of more supply disruptions as people want to 'stock up' on the good for future bad times. This fall in supply and rise in demand causes price to spiral; this is sometimes referred to as 'exploitation'. In fact, it is a clear illustration of demand and supply concepts.

c. Using two graphs, show consumer surplus before and after government intervention. Be precise. Label the axis and all the lines.

CS=green area

PS= blue area

774_demand and supply1.png

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