1. Suppose that the demand curve for plums is given by Z = 10-2p, where Z is the number of pounds demanded per year of plums and the price is p. a. Assume the price were $1. Find the total quantity demanded, the total amount spent, and calculate the consumer surplus. b. Now suppose that the government imposes a plum quota program (the PQP) so that plums now cost $2. Find the new quantity demanded, total amount spent, and total consumer surplus. What is the most consumers would be willing to sacrifice to get rid of the program (Hint: Think about the change in the consumer surplus and it means).
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Home » Business » 1. Suppose that the demand curve for plums is given by Z = 10-2p, where Z is the number of pounds demanded per year of plums and the price is p. a. Assume the price were $1.