(7.5 points) A local restaurant, DeyRhot, supposedly sells the best hotwings in
ID: 1127234 • Letter: #
Question
(7.5 points) A local restaurant, DeyRhot, supposedly sells the best hotwings in town. A single consumer's demand function for their hotwings is QD -7-.5p, and the supply function Qs-.667p. a. What is the equilibrium price and quantity for a single consumer? b. What is the consumer surplus and producer surplus? 6. One week, the restaurant owner decides to offer an "all you can eat" special for S30. Assuming the single consumer demand curve is still QD-7 - .5p, c. how many hotwings will the consumer now eat, and d. how much consumer surplus will the consumer now receive?Explanation / Answer
a) Qd =Qs
7-0.5p = .667p
7 = .667p + 0.5p
p= $6
Q = 7 - 0.5P
Q = 7 - 3 = 4
b) Consumer surplus = 1/2 * (14 - 6) * 4
Consumer surplus = $16
producer surplus = 1/2 * ( 6 ) * 4 = $12
c) Qd= 7 -0.5p
Qd = 7 -0.5*30
Qd = 7-15 = - 7
so no hotwings will the consumer now eat.
d) since the consumer is no longer demanded hotwing and not eat it. so there is no consumer surplus as there is no trading.
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