Answer to Question #288583 in Microeconomics for Lily

Question #288583

P=20-2Q demand function and P=10+6Q Supply function calculate consumers' and producer's surplus



1
Expert's answer
2022-01-18T15:12:19-0500

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×(2017.5)=1.5625.CS = 0.5×1.25×(20 - 17.5) = 1.5625.

PS=0.5×1.25×(17.510)=4.6875.PS = 0.5×1.25×(17.5 - 10) = 4.6875.


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