Refer to Figure 7-3. What is the reduction in value of consumer surplus after the imposition of the quota?
A) $8 million B) $26.25 million C) $27.75 million D) $30 million
D
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There are two firms in the residential paint industry, Cool Shades (C) and Warm Hues (W). They collude to share the market equally. They jointly set a monopoly price and split the quantity demanded at that price. Here are their options:
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