Question

LOL. LOE LOS th e r of an organization in Amerika met astuces blood to hospitals in a a nd the District of Columbia. A recent report indicates that nearly 50 American HIV each year through blood transfusions. Although every pint of blood donated ed States undergoes a battery of nine different tests, existing screening methods detely the antibodies produced by the body's immune system- not foreign agents the Hood Since it takes weeks or even months for these antibodies to build up in the Moodly infected HIV doors can pass along the virus through blood that has passed igreening tests. Happily, researchers have developed a series of new tests aimed detecting and removing infections from donated blood before it is used in transfusions. The bios benefit of these tests is the reduced incidence of infection through blood tandes. The report indicates that the current price of decontaminated blood is 560 per pint. However, if the new screening methods are adopted, the demand and apply for decontaminated blood will change to 210 - 1.5P and O-25P - 150. What price do you expect to prevail if the new screening methods are adopted? How many units of blood will be used in the United States? What is the level of consumer and producer plus? Illustrate your findings in a graph.(LOZ, LO3)

Answer 1

Given Qd= 210-1.5P

Qs=2.5P-150

To calculate equilibrium price and quantity,

At equilibrium Qd = Qs

210-1.5P = 2.5P-150

4P =360

Solving for P we get P = 90

Therefore Price = $90

Quantity = Qd= 210-1.5P

Qd= 210-1.5*90 = 210-135 = 75

Quantity is 75 units

In order to find the consumer and producer surplus.

let us calculate the Supply and Demand Y intercepts by setting the Quantity equal to 0 and solving for both the Supply and Demand Prices

210-1.5P = 0, Pd = 140

2.5P-150 = 0, Ps = 60

Therefore

Consumer Surplus = ((Pd-P) x Q)/2

= ( (140 - 90) x75) )/2 = 3750/2= $1875

Consumer Surplus = $1875

Producer Surplus= ((P - Ps) x Q)/2

((90 - 60) x75))/2 = 2250/2 = $1125

Producer Surplus= $1125

Find attached the image of graph representing the consumer and producer surplus

= 2.50.150 120 CS = $1875 80 FPS$1125 not 20--15P 4210 15 30 45 60 75 90 105 Quantity