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In an effort to help curb paper usage,the local office supply store uses an inclining price schedule where the price of paper costs more per
In an effort to help curb paper usage,the local office supply store uses an inclining price schedule where the price of paper costs more per ream the more you buy (a ream is a pack of paper).The price schedule is as follows:
- First 10reams of paper:$5/ream
- Next 15 reams of paper:$10/ream
- All additional reams of paper:$15/ream
Barbara has an inverse demand for paper given by P =20-0.5Q (or Q=40-2P),wherePis the price in $ and Qis number of reams of paper.Answer the following questions:
- How many reams of paper does Barbara buy?
- What is Barbara's consumer surplus?
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