2. For a particular commodity, the supply and demands functions are given by S(q) = 2q, D(q) = √192-8q where q is thousands of units and p is the the price per unit in dollars. (a) What is the equilibrium quantity q* and price p*? (b) Calculate the consumer's surplus and interpret your result.
2. For a particular commodity, the supply and demands functions are given by S(q) = 2q, D(q) = √192-8q where q is thousands of units and p is the the price per unit in dollars. (a) What is the equilibrium quantity q* and price p*? (b) Calculate the consumer's surplus and interpret your result.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Introduction
Here we are given the demand and supply curve of a particular commodity. Using them we will calculate the market equilibrium (where the demand and the supply curves intersects to each other), and hence we will determine the consumer surplus.
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