The demand curve for product X is given by Qxd = 500 - 4Px. The price of product X is $50. Assume that the information about product X from the problem changed to the following: Demand intercept: 450 Demand slope: -5 Price of product X: $20 Instruction: Update the data in your spreadsheet to the values above and enter the recomputed answers for the original questions. Required: 1. What is the intercept for the inverse demand curve? 2. What is the slope for the inverse demand curve? Instruction: Enter your response rounded to two decimal places and negative answer should be indicated by a minus sign. 3. How much consumer surplus do consumers receive at the given price?
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Step 1
To find the intercept for the inverse demand curve, we need to use the formula for the inverse demand curve, which is: Px = (a - Qx) / b where a is the intercept, b is the slope, Px is the price of the product, and Qx is the quantity demanded. Substituting the Show more…
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