%3Cp%3E%20Need%20micro%20Economics%20%26nbsp%3BHelp.%20Could%20you%20please%20sh
ID: 1098064 • Letter: #
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1)
The supply curve slopes upwards (since the coefficient on P in the supply curve is greater than zero) and the demand curve slopes downwards (since the coefficient on P in the demand curve is greater than zero)
In addition, we know that, in a basic market at least, the price that the consumer pays for a good is the same as the price that the producer gets to keep for the good. Therefore, the P in the supply curve has to be the same as the P in the demand curve.
QD = QS
600 -P = 4P -200
5P = 800
P = 160
Market Equilibrium price (P*)= 160
market equilibrium quantity (Q*) = 600 -P = 440
2)
At the equilibrium point, P=160,Q=440.
The consumer surplus is the area above the equilibrium price until the demand curve cut the vertical axis.
The consumer surplus = (600x440-160x440)/2=96800.
The producer surplus is the area above the supply curve but under the equilibrium price. So the producer surplus =
(160x440-50x440)/2=24200
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