Answer to Question #220776 in Microeconomics for Rahul jain

Question

Exercise: Suppose the demand curve is linear and is given by the equation P = a – bQ where P is price and Q is quantity. What is the consumer surplus if the equilibrium price is P* and equilibrium quantity is Q*?

Answer 1

$P = a – bQ$

Which can also mean

$P =dQ= a – bQ$

The consumer surplus will be

$\int_0^{Q^*}[a-bQ]dQ-(P^*)(Q^*)$