2. The demand and supply functions for seats on a certain weekend bus route are given by Demand function: P = 58 -0.2Q Supply function: P = 4 +0.1Q (a) Calculate the equilibrium price and quantity. Plot the demand and supply functions and illustrate consumer and producer surplus at equilibrium. (b) Calculate: (i) The amount consumers pay for bus journeys at equilibrium. (ii) The amount consumers are willing to pay for bus journeys up to equilibrium. (iii) The consumer surplus (CS); hence, show that the CS= (ii) - (i). (c) Calculate: (i) The amount the producer (bus company) receives for bus journeys at equilibrium. (ii) The amount the producer is willing to accept for bus journeys up to equilibrium. (iii) The producer surplus (PS); hence, show that the PS= (i) - (ii).
2. The demand and supply functions for seats on a certain weekend bus route are given by Demand function: P = 58 -0.2Q Supply function: P = 4 +0.1Q (a) Calculate the equilibrium price and quantity. Plot the demand and supply functions and illustrate consumer and producer surplus at equilibrium. (b) Calculate: (i) The amount consumers pay for bus journeys at equilibrium. (ii) The amount consumers are willing to pay for bus journeys up to equilibrium. (iii) The consumer surplus (CS); hence, show that the CS= (ii) - (i). (c) Calculate: (i) The amount the producer (bus company) receives for bus journeys at equilibrium. (ii) The amount the producer is willing to accept for bus journeys up to equilibrium. (iii) The producer surplus (PS); hence, show that the PS= (i) - (ii).
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:2. The demand and supply functions for seats on a certain weekend bus route are given by
Demand function: P = 58-0.2Q
Supply function: P = 4 +0.1Q
(a) Calculate the equilibrium price and quantity. Plot the demand and supply functions and
illustrate consumer and producer surplus at equilibrium.
(b) Calculate:
(i) The amount consumers pay for bus journeys at equilibrium.
(ii) The amount consumers are willing to pay for bus journeys up to equilibrium.
(iii) The consumer surplus (CS); hence, show that the CS = (ii) - (i).
(c) Calculate:
(i) The amount the producer (bus company) receives for bus journeys at equilibrium.
(ii) The amount the producer is willing to accept for bus journeys up to equilibrium.
(iii) The producer surplus (PS); hence, show that the PS = (i) - (ii).
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