Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 7, Problem 5P
To determine
The connection between total surplus and efficient level of output with the help of demand and supply curves.
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Suppose the demand and supply curves for good X are both linear. The demand price for the first unit of X is $28, and the supply price for the first unit of X is $6. If the equilibrium price for good X is $16 and the equilibrium quantity of X is 24,000 units, then total consumer surplus is ________, total producer surplus is ________, and total social surplus is ________.
$144,000; $120,000; $264,000
$144,000; $672,000; $384,000
$120,000; $144,000; $264,000
$28; $6; $16
$672,000; $144,000; $384,000
What is the term used to describe the situation where resources are allocated in a way that maximizes total surplus? A. Pareto efficiency B. Market equilibrium C. Social welfare D. Deadweight loss
D(x) is the price, in dollars per unit, that consumers are willing to pay for x units of an item, and S(x) is the price, in dollars per unit, that producers are willing to accept for x units. Find
(a)
the equilibrium point,
(b)
the consumer surplus at the equilibrium point, and
(c)
the producer surplus at the equilibrium point.
D(x)=(x−9)^2,
S(x)=x^2+6x+57
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