Question

Consider the accompanying supply and demand graph. A supply and demand graph with quantity on the horizontal axis which runs from 0 to 10 by increments of 1 and price in dollars on the vertical axis which runs from 0 to 9 in increments of 1 dollar. The demand curve is negatively sloped and intersects the price axis at 9 dollars. The supply curve is positively sloped and intersects the price axis at 1 dollar. The two curves intersect at a quantity of 5 and a price of 4. 50 dollars. What is the value of consumer surplus? $ what is the value of producer surplus? $ what is the value of total (also called social or economic) surplus? $.

Answer 1

The value of the consumer surplus is 11.25 while the producer surplus is 8.75.

How to calculate the consumer surplus?

To calculate the consumer surplus we must find the value of the hypotenuse using the Pythagorean theorem and then the area of the upper triangle.

5² + 4,5² = c²

25 + 20,25 = c²

45,25 = c²

$\sqrt[2]{45,25}$ = c

6,72 = c

Now we need to calculate the area of the triangle.

A = $\frac{1}{2}$bh

A = $\frac{1}{2}$(5)(4,5)

A = $\frac{1}{2}$22,5

A = 11,25

According to the above, we can infer that the area of the triangle is 11.25, so the consumer surplus is 11,25.

How to find the producer surplus value?

To find the value of the producer surplus we must calculate the hypotenuse and the area of the lower triangle.

3,5² + 5² = c²

12,25 + 25 = c²

37,25 = c²

$\sqrt{37,25}$ = c

6,10 = c

According to the above, side h of the triangle is equal to 6.10. Now we need to calculate the area of this triangle.

A = $\frac{1}{2}$bh

A = $\frac{1}{2}$(5)(3,5)

A = $\frac{1}{2}$ 17,5

A= 8,75

So the area of the bottom square that represents the producer surplus is 8.75

Note: This question is incomplete because the graph is missing. Here is the graph.

Learn more about supply and demand in: brainly.com/question/13353440