6.7_Applications_summer

6.7_Applications_summer - 6.7 Consumers’ and Producers’...

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Unformatted text preview: 6.7 Consumers’ and Producers’ Surplus • Market Equilibrium If D(x) is the demand function for a certain product and S(x) is the supply function for the same product, Market Equilibrium is the point (x,p) where supply equals demand. Consumers’ Surplus • The consumers’ surplus is given by CS = ∫ x [D(x) - p ] dx Where D is the demand function, x is the quantity sold, and p is the unit market price. 1. The demand function for a certain make of replacement cartridges is given by: D(x) = p(x) = -.01x 2- .1x + 8 where p is the unit price in dollars and x is the quantity demanded each week, measured in units of a thousand. (x = 20) Determine the consumers’ surplus if the market price is set at $2 per cartridge. ( select) 73,333 Producers’ Surplus The producers’ surplus is given by PS = ∫ x [p - S(x) ] dx Where S is the supply function, x is the quantity supplied, and p is the unit market price....
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6.7_Applications_summer - 6.7 Consumers’ and Producers’...

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