Homework Answers
given, there are 100 consumers and each having demand qd and whole market demand is Qd
hence 100qd=Qd and qd=Qd/100=0.01Qd
hence we can write market demand equation from individual demand equation as
0.01Qd=2.2-0.02p+0.005Qd
or 0.005Qd=2.2-0.02p
or Qd=440-4p
hence dQd/dp=-4
hence the slope of the market demand curve is -4
now rewriting the demand equation as, 4p=440-Qd or P=110-0.25Qd
when Qd=0 , P=110 hence maximum price for this market is 110
market equilibirum is set on when demand=suuply
hence 440-4p=200+6p or 10p=240 or p=24, hence market equilibrium quantity is Q=440-4x24=344
market equilibrium quantity is 344
consumer surplus at market equilibrium price is=0.5x(maximum possible price-market price)equilibrium quantity=0.5x(110-24)x344=14792
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