A demand curve is given by P=50-2Q. If the government gives away this good for free...

A demand curve is given by P=50-2Q. If the government gives away this good for free what is the consumer surplus?

Solutions

Expert Solution

P = 50- 2Q

So if Q = 0 , we have y intercept as P = 50 .

So now if government give away this food for free , then food price will be 0 .

So at Price = 0 , Q = 25 units

Consumer surplus = 1/2 * 50 * 25

= 25*25 = $625 will be consumer surplus

Rahul Sunny answered 1 year ago

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