Consider the given Supply and Demand curves: D:100q +p3 = 9800 S : 4√ q −3p =0 (a)  Determine the elasticity of Demand at p = 20. (b) Determine the Consumer Surplus from trade in a free market setting.

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Maximization

Have you ever seen a bridge in the shape of a parabola? Where is its maximum on the bridge? The maximum of that bridge is the highest point on that bridge. The process of finding the maximum of the bridge here is called the maximization.