The market supply curve for paper is currently estimated to be: Q(S) = 100 + 10P What is the producer surplus when the market price is equal to $50? my answer is producer surplus (1/2)*600*40=12000
Added by Kyle D.
Step 1
Let's assume the market demand for paper is given by Q(D) = 200 - 5P. Then: Q(S) = Q(D) 100 + 10P = 200 - 5P 15P = 100 P = 6.67 So the equilibrium price is $6.67 and the equilibrium quantity is: Q = 100 + 10(6.67) = 166.7 Now, we need to find the producer Show more…
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