Answered: . Given QD =40 - 0.02P and QS = -50…

. Given QD =40 - 0.02P and QS = -50 +0.1P, Calculate a) Equilibrium price and quantity b) Consumer surplus c) Producer surplus

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter3: Market Demand And Supply

Section3.A: Consumer Surplus, Proudcer Suplus, And Market Efficency

Problem 16SQ

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Question

1. Given QD =40 - 0.02P and QS = -50 +0.1P, Calculate

a) Equilibrium price and quantity

b) Consumer surplus

c) Producer surplus

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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