Question
If the equilibrium quantity is 20 and the equilibrium price is 25, and the maximum someone is willing to pay is 60 and the supply
If the equilibrium quantity is 20 and the equilibrium price is 25, and the maximum someone is willing to pay is 60 and the supply curve intersects the y axis at zero:
A.Draw the graph of supply and demand using the information above.
B.Calculate the consumer surplus using the formula for the area of a triangle: Base x Height
C.Calculate the producer surplus using the formula for the area of a triangle: Base x Height
D.What is the total surplus?
E.If this market is perfect competition, is it efficient?
Step by Step Solution
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Step: 1
A Graph of supply and demand Given Equilibrium quantity Qe 20 Equilibrium price Pe 25 Maximum willin...
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Macroeconomics Principles Applications And Tools
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
7th Edition
978-0134089034, 9780134062754, 134089030, 134062752, 978-0132555234
