Question 4 The demand curve and supply curve for the same commodity are given: u

Question

Question 4 The demand curve and supply curve for the same commodity are given: units q=D(p) q = S(p) 120- A1 p dollars per unit 10 25 50 Area of Al-1600, area of A2-1400, and area of A3-1300. a. Find the market equilibrium. Answer: equilibrium price is dollars per unit, equilibrium quantity is units b. Find the consumer willingness and ability to spend at market equilibrium. Answer: c. Find the producer revenue at market equilibrium. Answer: d. Find the producer willingness and ability to receive at market equilibrium. Answer: e. Find the total social gain at market equilibrium. Answer: delars dollars dollars dollars

Explanation / Answer

From the given question,

a)The equilibrium price is 25 dollars per unit.

equilibrium quantity is 120 units.

b)consumer willingness and ability to spend at equilibrium=$1600

c)producer revenue at market equilibrium=$1400

e) Total social gain at market equilibrium=$1600-$1400=$200

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