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Problem
Use the areas labeled in the market represented in Figure 5P-7 to answer the following questions.
a. What area(s) are consumer surplus at the market equilibrium price?
b. What area(s) are producer surplus at the market equilibrium price?
c. Compared to the equilibrium, what area(s) do consumers lose if price is P2?
d. Compared to the equilibrium, what area(s) do producers lose if the price is P2?
e. Compared to the equilibrium, what area(s) do producers gain if the price is P2?
f. Compared to the equilibrium, total surplus decreases by what area(s) if the price is P2?
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