Question A winery produce x thousand bottles of premium wine when the price for each bottle is S(x)=1.4x^2-50x+1480 The monthly demand for the bottles of wine is related to the price by D(x)=-x^2+34.8x+1928 A Find the consumer surplus and producer surplus when the market is at equilibrium. B Find the change in consumer and producer surplus when the price increases by $20. Explain what happened. (Hint because it is a price increase and consumers will buy less use the demand equation to find the new quantity in the market. Please answer all parts.

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Market Surplus and Shortage Analysis

In everyday language, a “surplus” indicates that there is an excess of something, while a “shortage” means that there is a scarcity of it. In economics, “market surplus” refers to the condition where the quantity of a certain good more available than what is required or “demanded” by the market. In the same way, a “market shortage” refers to the condition where the quantity of a certain good is less available than what is “demanded” by the market. If quantity in demand is written as Qd and quantity that is supplied is written as Qs, then, the condition Qs > Qd indicates market surplus and condition Qd > Qs indicates market shortage.