00:02
Hello, let's start with part a.
00:05
What is the value of consumer surplus in this case? consumer surplus would be equal to multiply one half because we use the formula of the right triangle.
00:17
The difference in prices, which is 8 minus 4, this is the height of this triangle, multiplied by the base of this triangle and it's 20.
00:32
So it will be equal to 40.
00:37
Consumer surplus is equal to 40.
00:42
Now, b, what is the value of producer surplus? again, we use the same formula, multiply 1 half by the height of this triangle, which is 4 minus 2.
00:56
And the base is also 20, 20 millions.
01:02
So here we have 40 millions and here we have 20 millions.
01:15
And now part c suppose over production occurs in this market.
01:19
Now 30 million dvds are produced and sold...
