Quantity demanded as a function of price is given by Q(P)=100-0.5 x P. If the market...

Quantity demanded as a function of price is given by Q(P)=100-0.5 x P. If the market price is P=€150 what is consumer surplus

Solutions

Expert Solution

Q = 100-0.5P

at Q=0,

0 = 100-0.5P

0.5P = 100

P = 100/0.5 = 200

Also at P=150, Q = 100-0.5*150 = 25

at a price of 150, the consumer surplus will be

CS = 0.5*(200-150)*25 = 625

Rahul Sunny answered 1 year ago

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