Question

A market has a demand curve given by P = 800 – 10Q where P =...

  1. A market has a demand curve given by P = 800 – 10Q where P = the price per unit and Q = the number of units. The supply curve is given by P =100 + 10Q.


    1. (10 points) Graph the demand and supply curves and calculate the equilibrium price and quantity in this market.

    2. (5 points) Calculate the consumer surplus at equilibrium.

    3. (5 points) Calculate the producer surplus at equilibrium.(5 points)


    5. (5 points) Calculate the total surplus at equilibrium

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Demamd equation; P = 800 – 10Q

supply equation P =100 + 10Q.

Equilibrium achived where Demand = Supply

800-10Q = 100+10Q

20Q = 700

Q =700/20

Q = 35

Put Q = 35 in demand equation to calculate equilibrium price

P = 800 -10Q

P = 800 - 10*(35)

P = 800 - 350

P = 450

Consumer Surplus = 1/2*change in price *quantity

= 1/2*(800-450)*35

= 6,125

Producer Surplus = 1/2*change in price *quantity

= 1/2*(450-100)*35

= 6,125

Total Surplus = Consumer surplus + Producer surplus

= 6,125+6,125

= 12,250

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The demand curve of a perfectly competitive product is described by the equation:     P =...
The demand curve of a perfectly competitive product is described by the equation:     P = $1000 – Q    where Q = thousands The supply curve is given by     P = $100 + 2Q     where Q = thousands Graph the demand and supply curves; use a grid size of 100. Calculate the equilibrium price and quantity (carefully state the units).  Find the consumer surplus CS, the producer surplus PS, and the deadweight loss DWL, carefully stating the units.
The market for bauxite is perfectly competitive. Market inverse demand is given by PD(Q)=500-Q, where price...
The market for bauxite is perfectly competitive. Market inverse demand is given by PD(Q)=500-Q, where price is measured in dollars per ton and Q is measured in million of tons. Market inverse supply of bauxite is PS(Q)=100+Q, where price is measured in dollars per ton and Q is measured in millions of tons. -Calculate the equilibrium price and quantity in this market. Represent your solution using a graph. -Calculate producer and consumer surplus. Identify consumer and producer surplus on a...
Suppose the market demand for a commodity is given by the download sloping linear demand function:...
Suppose the market demand for a commodity is given by the download sloping linear demand function: P(Q) = 3000 - 6Q where P is a price and Q is quantity. Furthermore, suppose the market supply curve is given by the equation: P(Q) = 4Q a) Calculate the equilibrium price, quantity, consumer surplus and producer surplus. b) Given the equilibrium price calculated above (say's P*), suppose the government imposes a price floor given by P' > P*. Pick any such P'...
The market for apples is perfectly competitive, with the market supply curve is given by P...
The market for apples is perfectly competitive, with the market supply curve is given by P = 1/8Q and the market demand curve is given by P = 40 – 1/2Q. a. Find the equilibrium price and quantity, and calculate the resulting consumer surplus and producer surplus. Indicate the consumer surplus and producer surplus on the demand and supply diagram. b. Suppose the government imposes a 10 dollars of sale tax on the consumer. What will the new market price...
The market for a product has inverse demand and supply functions given by p = 290...
The market for a product has inverse demand and supply functions given by p = 290 - 2Qd and p = 10 + 1.5Qs In what form are these functions in? (2pts) Find the market equilibrium quantity Q* and price P*. (5pts) Draw out a simple graph with these curves. Label the p-intercept for each and indicate the equilibrium points. (5pts) Find the consumer and producer surpluses, along with the total surplus.(10pts) (i) Would this market be considered efficient? (2pts)
Consider the market for hiking boots. This market can be represented by the following supply and...
Consider the market for hiking boots. This market can be represented by the following supply and demand equations: Q=100–2P (demand) and Q= –20 +P (supply) a. Graph the supply and demand curves, labeling the axes clearly. Calculate the equilibrium price and quantity in this market (Q represents a pair of boots), and label these points on the graph. b. Calculate consumer surplus, producer surplus, and net benefits in the market for hiking boots.
The demand for sunglasses is given by D(p) = 100 − 2 p and the supply...
The demand for sunglasses is given by D(p) = 100 − 2 p and the supply curve is given by S(p) =3p (a) Compute the equilibrium price and equilibrium quantity of sunglasses. (b) Sketch both the demand and supply curves on the same graph (be sure to label your axes correctly). (c) Determine the value of consumer surplus and producer surplus at the equilibrium values. Suppose all sunglasses are imported from China. Suppose also that the government imposes an import...
The inverse demand curve for delivery meals is: Pd=18-3Qd the inverse supply curve is: Ps=3Qs where...
The inverse demand curve for delivery meals is: Pd=18-3Qd the inverse supply curve is: Ps=3Qs where p is price of meal in dollars, Q is quantity in thousands of meals a.) solve for equilibrium price and quantity b.) draw the supply and demand curves and the equilibrium outcome on axes below and label graph c.) Calculate the consumer surplus and producer surplus in this market, and show them on the set of axes above. d.) suppose the government imposes a...
Suppose the weekly demand for a certain good in thousands of units, is given by the...
Suppose the weekly demand for a certain good in thousands of units, is given by the equation P = 35 - Q, and the weekly supply curve of the good by the equation P = 15 + Q where P is the price in dollars. Finally, suppose a per-unit tax of $6, to be collected from sellers is imposed in this market. Complete the following questions. Note: If necessary round your answers to two decimal places. a) Graph the weekly...
Assume that the demand curve D(p) given below is the market demand for apples: Q=D(p)=320−12pQ=D(p)=320-12p, p...
Assume that the demand curve D(p) given below is the market demand for apples: Q=D(p)=320−12pQ=D(p)=320-12p, p > 0 Let the market supply of apples be given by: Q=S(p)=60+15pQ=S(p)=60+15p, p > 0 where p is the price (in dollars) and Q is the quantity. The functions D(p) and S(p) give the number of bushels demanded and supplied. What is the consumer surplus at the equilibrium price and quantity? Round the equilibrium price to the nearest cent, use that rounded price to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT