MGEB02H3 Chapter : Week 12 chapter notes

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Chapter 9 the analysis of competitive markets notes. 9. 1 evaluating gains and losses from government policies consumer & producer surplus. N deadweight loss net loss of total (consumer plus producer) surplus. N welfare effects gains and losses to consumers and producers. N with appropriate quotas, the price can then be forced up to any arbitrary level. N without these, country will import good when its world price is below price that would prevail locally were there no imports. 9. 6 the impact of a tax or subsidy. Pass-through fraction = es / (es ed) N www. notesolution. com subsidy payment reducing the buyer"s price below the seller"s price; i. e. , a negative tax. N with a subsidy, the sellers" price exceeds the buyers" price, and the difference between the two is the amount of the subsidy. In each case, consumer and producer surplus are used to evaluate the gains and losses to consumers and producers.

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