Suppose that you are the vice president of operations of a manufacturing firm that sells an industrial lubricant in a competitiv
e market. Further suppose that your economist gives you the following supply and demand functions: Demand: Upper Q Superscript Upper D = 45 minus 2 Upper P Supply: Upper Q Superscript Upper S = negative 15 plus Upper P. What is the consumer surplus in this market? Consumer surplus is $ 20.25. (Enter your response rounded to two decimal places.)
1 answer:
Answer:
400
Explanation:
Qd = 45 - 2P
Qd = -15 + P
45 - 2P = P - 15
60 = 3P
60/3 = P = 20
Q = 45 - 2*20 = 5
Q = -15+20 = 5
The quantity will be 5 and price 20
<u>Now we will caclulate the consumer surplus:</u>
Which the area of the demand curve above the equilibrium.
We calculate he area of a triangle:
base x high / 2
consumer surplus = 400
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The enviroment will decrease at more industrial output.
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