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Figure: The Domestic Supply and Demand for SUVs in Canada
-(Figure: The Domestic Supply and Demand for SUVs in Canada)Use Figure: The Domestic Supply and Demand for SUVs in Canada.Suppose that the world price equals $50 000 and there is free trade.Calculate the loss of consumer surplus.

Question

Use the following to answer questions:
Figure: The Domestic Supply and Demand for SUVs in Canada 
-(Figure: The Domestic Supply and Demand for SUVs in Canada)Use Figure: The Domestic Supply and Demand for SUVs in Canada.Suppose that the world price equals $50 000 and there is free trade.Calculate the loss of consumer surplus.

Quizplus · Accepted Answer

The loss of consumer surplus is calculated based on the difference between the domestic price and the world price, multiplied by the quantity of SUVs affected. The correct calculation leads to a loss of $41,250 million in consumer surplus.

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