Question

Use the linear demand and supply curves shown below to answer the following questions.You must show all calculations step-by-step .

a) The market or equilibrium price is $__________.

52.50 50 Price (dollars) Qd. Qg 10,000 20,000 15,000 20000 30,000 40,000 20000 some and 50,000 60,000 Quantity demanded and supplied

b) When 10,000 units are produced and consumed, total consumer surplus is $__________, and total producer surplus is $__________.

c) At the market price in part a, the net gain to consumers when 10,000 units are purchased is $__________.

d) At the market price in part a, the net gain to producers when they supply 10,000 units is $__________.

e) The net gain to society when 10,000 units are produced and consumed at the market price is $__________, which is called __________.

f) In market equilibrium, total consumer surplus is $__________, and the total producer surplus is $__________.

g) The net gain to society created by this market is $__________.

Answer 1

Eeytibaium brite Set where demand and uppdy are eauel. Eguilibrium prio:37.5 Conaumes Surplus": 0 5( 52-50- 42-50) C10,000 0:5X 1o x 1c, c00 %3D %3D 50,000 Produlur duplus ', ( 42-50-30)(1or00)+05)(30-15(10,500) %3D P00,000 %3D ) Gonsumer Suspluw, o s(52:50- 3+50) CISU0) 112,500, Net goin 112 500-J, 0 62,000 ) Ps= 0.5 (87.50 -15)(1500) = 168750 200 000468,750 Net paind! 3/250