Question

17. Demand and Supply curves can be represented by:     Qd = 90-2P; and Qs = 3P....

17. Demand and Supply curves can be represented by:     Qd = 90-2P; and Qs = 3P.

Using the same Demand and Supply curves that can be represented by:     Qd = 90-2P; and Qs = 3P. Producer Surplus is:

$486
$243
$118
$900
1 0
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Answer #1

Qd = 90-2P

Qs = 3P

At Equilibrium Qd=Qs

90-2P= 3P

5P= 90

P=$18 (Equilibrium price)

Q = 3P

Q= 3(18) = 54 (Equilibrium quantity)

Producer surplus is the triangle area under the equilibrium price and above the supply curve.

PS = (0.5)(18-0)(54)

PS = $ 486

Hence, option(A) is correct.

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