The demand and supply functions a firm producing a certain product are given respectively by: and , where p is the price per unit and quantities are in millions per year. How much consumer surplus (CS1) do consumers receive when price is P1 = $60? Quantitydemanded, QdQuantitysupplied, QsPrice, p$50$200$0$60$ 190$30$70$180$60$80$170$90$90$160$120$100$150$150$110$140$180$120$130$210$130$120$240$140$110$270$150$100$300$160$90$330$170$80$360$180$70$390$190$60$420$200$50$450

Consumer surplus is the area under the demand curve but above the actual price. Consumer Surplus is…

Quantity demanded, Qd Quantity supplied, Qs Price, p $50 $200 $0 $60 $ 190 $30 $70 $180 $60 $80 $170 $90 $90 $160 $120 $100 $150 $150 $110 $140 $180 $120 $130 $210 $130 $120 $240 $140 $110 $270 $150 $100 $300 $160 $90 $330 $170 $80 $360 $180 $70 $390 $190 $60 $420 $200 $50 $450

Quantity demanded, Qd Quantity supplied, Qs Price, p $50 $200 $0 $60 $ 190 $30 $70 $180 $60 $80 $170 $90 $90 $160 $120 $100 $150 $150 $110 $140 $180 $120 $130 $210 $130 $120 $240 $140 $110 $270 $150 $100 $300 $160 $90 $330 $170 $80 $360 $180 $70 $390 $190 $60 $420 $200 $50 $450

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter20: The Problem Of Adverse Selection Moral Hazard

Section: Chapter Questions

Problem 3MC

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Question

The demand and supply functions a firm producing a certain product are given respectively by:

and ,

where p is the price per unit and quantities are in millions per year.

How much consumer surplus (CS1) do consumers receive when price is P1 = $60?

Quantity
demanded, Qd
Quantity
supplied, Qs
Price, p
$50
$200
$0
$60
$ 190
$30
$70
$180
$60
$80
$170
$90
$90
$160
$120
$100
$150
$150
$110
$140
$180
$120
$130
$210
$130
$120
$240
$140
$110
$270
$150
$100
$300
$160
$90
$330
$170
$80
$360
$180
$70
$390
$190
$60
$420
$200
$50
$450

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