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Suppose that your demand curves for gadgets and widgets are both straight lines but your demand curve for gadgets is much more elastic than your demand curve for widgets. Each is selling at a market price of $10, and at that price you choose to buy exactly 30 gadgets and 30 widgets.

A. From which transaction do you gain more surplus?
B. If forced at gunpoint to buy either an extra gadget or an extra widget, which would you buy?
C. Illustrate the change in your consumer's surplus as a result of the forced transaction of part B.

Microeconomics, Economics

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