The demand curve for a product is given by QD = 475 - 25P and the supply curve for a product %3D is given by QS = 15P - 45 a) Illustrate the demand curve and the supply curve on the same graph. Label both axes. b) Calculate both the equilibrium price and quantity. c) Calculate the consumer surplus and the producer surplus. d) Identify consumer surplus and producer surplus on your graph. Label as CS and PS. e) Find the total willingness to pay for the equilibrium quantity and the total variable cost of supplying the equilibrium quantity. Identify these areas on your graph.
The demand curve for a product is given by QD = 475 - 25P and the supply curve for a product %3D is given by QS = 15P - 45 a) Illustrate the demand curve and the supply curve on the same graph. Label both axes. b) Calculate both the equilibrium price and quantity. c) Calculate the consumer surplus and the producer surplus. d) Identify consumer surplus and producer surplus on your graph. Label as CS and PS. e) Find the total willingness to pay for the equilibrium quantity and the total variable cost of supplying the equilibrium quantity. Identify these areas on your graph.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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