How much would cons mmers gain and domestic producers lose? 94.7 21.5 hi c d 192 f B 8.3 0 →Q 4617420421.1 Figure9.11.b The gain in consumer surplus is area a+b+e+d in Figure 9.11.b.The loss to domestic producers is equal to area a. Numerically: a=(21.5-19.2146+(17.4146021.5-19.25=36.8 b=(17.414.6021.5-19.2)(5)=3.22 c=(21.5-19.220.4-17.4=6.9 d=(21.5-19.221.1-20.5(.5=0.69. These numbers are in billions of cents or tens of millions of dollars. Thus,consumer surplus increases by $476.1 million,while domestic producer surplus decreases by $368 million. What would be the effect on deadweight loss and foreign producers? When the quota was 3 billion pounds,the profit earned by foreign producers is the difference between the domestic rice and the world price(21-8)times the billio units sold,for a total When the quotais to 6.5 billion pounds,domestic price will fall to 19.2 cents per pound and profit earned by foreigners will be (19.2-8.3)*6.5=70.85,or $708.5 million.Profit earned by foreigners therefore increased by $312.5 million.On the graph above. this is area (+)+g.The deadweight loss of the quota decreases by area b+e+d+g.which is to $420 6 millionb. How much would consumers gain and domestic producers lose? a b c d S D 14.6 17.4 20.4 21.1 21.5 19.2 Q P 94.7 e f g 8.3 Figure 9.11.b The gain in consumer surplus is area a+b+c+d in Figure 9.11.b. The loss to domestic producers is equal to area a. Numerically: a = (21.5-19.2)(14.6)+(17.4-14.6)(21.5-19.2)(.5)=36.8 b = (17.4-14.6)(21.5-19.2)(.5)=3.22 c = (21.5-19.2)(20.4-17.4)=6.9 d = (21.5-19.2)(21.1-20.5)(.5)=0.69. These numbers are in billions of cents or tens of millions of dollars. Thus, consumer surplus increases by $476.1 million, while domestic producer surplus decreases by $368 million. c. What would be the effect on deadweight loss and foreign producers? When the quota was 3 billion pounds, the profit earned by foreign producers is the difference between the domestic price and the world price (21.5-8.3) times the 3 billion units sold, for a total of 39.6, or $396 million. When the quota is increased to 6.5 billion pounds, domestic price will fall to 19.2 cents per pound and profit earned by foreigners will be (19.2-8.3)*6.5=70.85, or $708.5 million. Profit earned by foreigners therefore increased by $312.5 million. On the graph above, this is area (e+f+g)-(c+f)=e+g-c. The deadweight loss of the quota decreases by area b+e+d+g, which is equal to $420.6 million