The Quantity Demanded for Wireless Computer Mouses Is Q_d =

question 23

Essay

The quantity demanded for wireless computer mouses is Q_d = 500 - 1.75P, and the quantity supplied is Q_s = 450 + 0.25P.
a. Calculate the equilibrium price and quantity.
b. Is total surplus maximized at 440 mouses? Explain.
c. If the market price is currently $10, is there a shortage or surplus of mouses? How do you know?
d. If the market price is $40, is there a shortage or surplus of mouses? How do you know?

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Definitions:

Direct Labor

The wages paid to workers who are directly involved in the production of goods or in providing services.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services in the manufacturing process.

Factory Utilities

The cost of services such as electricity, water, and gas used in the manufacturing process.

Managerial Accounting

Managerial accounting involves the provision of financial data and advice to a company's management for decision-making.