1.3. The demand and supply function of a commodity are P₁ = 85-5x and P₂ = 3x - 35.a. Find the equilibrium price and quantity demanded.b. Find the consumers surplus at equilibrium price.

Demand in economics refers to a consumer's willingness and ability to purchase a particular quantity…

Answered: 1.3. The demand and supply function of…

1.3. The demand and supply function of a commodity are P₁ = 85-5x and P, = 3x - 35. a. Find the equilibrium price and quantity demanded. b. Find the consumers surplus at equilibrium price.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 1WNG

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Concept explainers

Market Surplus and Shortage Analysis

In everyday language, a “surplus” indicates that there is an excess of something, while a “shortage” means that there is a scarcity of it. In economics, “market surplus” refers to the condition where the quantity of a certain good more available than what is required or “demanded” by the market. In the same way, a “market shortage” refers to the condition where the quantity of a certain good is less available than what is “demanded” by the market. If quantity in demand is written as Qd and quantity that is supplied is written as Qs, then, the condition Qs > Qd indicates market surplus and condition Qd > Qs indicates market shortage.

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1.3. The demand and supply function of a commodity are P₁ = 85-5x and P₂ = 3x - 35.
a. Find the equilibrium price and quantity demanded.
b. Find the consumers surplus at equilibrium price.

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