Q^d= 9.5 - 2p Q^s= 0.6p 1. Competitive Equilibrium. In this question you solve for the competitive equilibrium in the market for donuts. (a) Solve for the equilibrium price and quantity of donuts. Note: some combinations of A and β will imply quite cheap or quite expensive donuts - so don’t worry if your answer seems unrealistic. Also, it is very likely that your equilibrium quantity will include a fraction – again don’t worry. (b) Rewrite the demand curve as the inverse demand curve, that is P = .... and plot this along with the supply curve. Indicate the equilibrium price and quantity, as well as the areas which represent consumer and producer surplus. (c) Calculate the amount of producer and consumer surplus in this equilibrium.
Q^d= 9.5 - 2p Q^s= 0.6p 1. Competitive Equilibrium. In this question you solve for the competitive equilibrium in the market for donuts. (a) Solve for the equilibrium price and quantity of donuts. Note: some combinations of A and β will imply quite cheap or quite expensive donuts - so don’t worry if your answer seems unrealistic. Also, it is very likely that your equilibrium quantity will include a fraction – again don’t worry. (b) Rewrite the demand curve as the inverse demand curve, that is P = .... and plot this along with the supply curve. Indicate the equilibrium price and quantity, as well as the areas which represent consumer and producer surplus. (c) Calculate the amount of producer and consumer surplus in this equilibrium.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Q^d= 9.5 - 2p
Q^s= 0.6p
1. Competitive Equilibrium. In this question you solve for the competitive equilibrium in the market for donuts. (a) Solve for the equilibrium price and quantity of donuts. Note: some combinations of A and β will imply quite cheap or quite expensive donuts - so don’t worry if your answer seems unrealistic. Also, it is very likely that your equilibrium quantity will include a fraction – again don’t worry. (b) Rewrite the demand curve as the inverse demand curve, that is P = .... and plot this along with the supply curve. Indicate the equilibrium price and quantity, as well as the areas which represent consumer and producer surplus . (c) Calculate the amount of producer and consumer surplus in this equilibrium.
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