QD = 90 - 15P QS = 10P - 10 Graph the demand curve, labeling the...

Q^D = 90 - 15P

Q^S = 10P - 10

Graph the demand curve, labeling the price and quantity intercepts. What is the value of the price (vertical) intercept?
(Hint: What is P if Q^D = 0?)
a. What is the value of the quantity (horizontal) intercept of the demand curve? (Hint: What is Q^D if P = 0?)
b. What is the quantity demanded at a price of $2.00 per unit?
c. Identify the area of consumer surplus on your graph at a price of $2.00 per unit. Calculate the value of consumer surplus at a price of $2.00 per unit. (Use the area of a triangle formula, base x height x ½).
d. What is the willingness to pay for the 45th unit, where Q=45?

Expert Solution

Rahul Sunny answered 2 years ago

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