Answered: The demand function for a certain brand…

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter5: Supply, Demand, And Price: Applications

Section5.7: Application 7: Why Do Colleges Use Gpa,s Actss, And Sats, For Purposes Of Admission?

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The demand function for a certain brand of CD is given by

p = -0.01x^2 - 0.2x +10

where p is the unit price in dollars and x stands for the quantity that will be made available in the market by the supplier, measured in units of a thousand. Determiine the producer's surplus if the market price is set at the equilibrium price. (round answer to neareset dollar)

P = 0.01x^2 + 0.4x +2

Expert Solution

Step 1

Demand function of CD brand:

$p = - 0.01 x^{2} - 0.2 x + 10$ .......... (1)

Supply function of the CD brand

$p = 0.01 x^{2} + 0.4 x + 2$ .......... (2)

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