Question

2. The market for bagels in Philadelphia is perfectly competitive. In Philadelphia, the daily demand for bagels is Qd = 15,000 – 5,000P, which is graphed as D in the figure below. The industry supply of bagels in Philadelphia is Qs =-6,000 + 10,000P, which is graphed as S in the figure. 3.00 2.00 S Price of bagels (dollars) 1.00 0.60 D 1 0 5,000 10,000 15,000 Quantity of bagels (per day)

Answer 1

27 xl price of bogel : {P= $1.4] demand for bagels ad 15000 - 500 op sulfly for begels of a -6000 t1oooop for Q = 2000 we need to find consumer and producer surlans for 2000th begel. g) pay. soool Jouup ناں م2 -بابا( CH bonneb for 10-2005 the price consumer willing to = IJOUS 1 fifties en 2006 d t 15ooo! [P 2.6.) root oorn is to the consumer surplug af pl - p. = 2.6-1.4 = 1.2 rodo to gruod Susic for 0= 206.) the toprice at which producer willing rusenal da to supply 2000 to 6ow EP booot 100oup د یا نارا 1 (0.8=p] Producer surplus Pops = 1.4-0.8 - 6.6 murxidiline

3 2.6 + P2 No. TE D C Consumer surblic of(s. 6+1.2) (2000) h2 supply 1.4 Demand to 5ooo Quantity 15000 of bagets Area ABDE - ( AE+ BDLED) 2 2. = 2800] D Consumer surplus of . . Producer surplus = Area EDCE = LLEF + DL) (ED) = 1 (Oofo + 0.6) (2000) of Bould 2 binub . رو من ند) soud producer surplus $ 1400 sularen bij Total surplus = Consumer surplust Producer sur irplus 2800 t1400 h [Soyal surplus = $4200] ont ad pid surtstof mis bahasd borty

is the equilibrium occurs and supply when the dimine Curve intersect. TA 3 S (Price 1.4. TE و نه به 15oou rowana exquilibrium co 2 fo) 0:66 FF Lash Reubefund to convence roos) (fl +8006 Quantity [urst X is the point. a Cata1) = Da bi se Golond nagebord social surplus = Area AXF - I (AF) CEx) Cunos! (d.at - 112.40(8000) v9 ) Mburg [roid surplus $9600 oy uldine 19) boy tulfona romana = selera lutot I The soud surplus in competitive equilibinum is higher than social serplus at 2000 bagels per day Yes this is expected because at competitive So cual surplus is maximized. equilibirium