P=20-2Q demand function and P=10+6Q Supply function calculate consumers' and producer's surplus
In equilibrium:
20 - 2Q = 10 + 6Q,
Q = 1.25 unit,
P = 20 - 2×1.25 = 17.5.
Consumer surplus is:
CS=0.5×1.25×(20−17.5)=1.5625.CS = 0.5×1.25×(20 - 17.5) = 1.5625.CS=0.5×1.25×(20−17.5)=1.5625.
PS=0.5×1.25×(17.5−10)=4.6875.PS = 0.5×1.25×(17.5 - 10) = 4.6875.PS=0.5×1.25×(17.5−10)=4.6875.
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