Demand Is Represented by the Equation, P = 200 -

question 30

Essay

Demand is represented by the equation, P = 200 - 2QD and supply by the equation P = 25 + 3QS.(a) Suppose this market produces 30 units of output.What price would this output be sold at if consumers we going to buy all goods? What is the marginal benefit to society of the 30^th unit? What is the marginal cost of the 30^th unit?
(b) What is consumer surplus if the market produces 30 units of output? What is producer surplus? What is the sum of consumer and producer surplus?
(c) What are the equilibrium price and quantity?
(d) What is consumer surplus at equilibrium? What is producer surplus? What is the sum of consumer and producer surplus?
(e) Is allocative efficiency achieved when the market produces 30 units of output? Explain in three different ways.

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Definitions:

Increases

Refers to a growth or rise in quantity, size, number, or intensity of a particular object or phenomenon.

Decreases

The process of becoming smaller or fewer in amount, size, intensity, or degree.

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Resolute

Demonstrating firm determination or unwavering resolve in attitude, purpose, or action.