Question

the supply and demand for broccoli are described by the following equations;supply QS=6p-80 Demand QD= 120-4p
a. grapgh the suppply curve and the demand curve .what is the equalibrium price and quantity?
b.calculate consumer surplus,producer surplus and total surplus at the equalibrium.
c.if a dictator who hated brocooli were to ban the vegetables,who would bear the larger burden_the buyers or sellers of brocooli?

Answer 1

$a)6p-80=120-4p;$

$10p=200;$

$p=\$20;$

$Qs=6×20-80=40;$

$Qd=120-4×20=40;$

b)$Qd=120-4p=0;$

$4p=120; p=30;$

  consumer surplus equal to the area of the hatched triangle.

consumer surplus$=\frac {1}{2}(30-20)*40=\$200;$

$Qs=6p-80=0; p=\$13.3;$

producer  surplus equal to the area of the hatched triangle.

producer  surplus $=\frac{1}{2}(20-13.3)*40=$ $\$134;$

$TS=CS+PS; TS=134+200=\$334;$

c) If broccoli is banned, broccoli buyers will bear a greater burden.