Suppose That the Market Demand Curve for Residential Water Is

question 49

Essay

Suppose that the market demand curve for residential water is:
Q^D = 10 - 2.25P
and the market supply curve is:
Q^S = -10 + 2.75P
where the quantity is measured in millions of gallons per month and the price is in dollars per thousand gallons. Calculate the producer surplus at the equilibrium price.

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