D(x) is the price, in dollars per unit, that consumers are willing to pay for x units of an item, and S(x) is the price, in dollars per unit, that producers are willing to accept for x units. Find (a) the equilibrium point, (b) the consumer surplus at the equilibrium point, and (c) the producer surplus at the equilibrium point.D(x)=−65x+13,S(x)=21x+5
Q. D(x) is the price, in dollars per unit, that consumers are willing to pay for x units of an item, and S(x) is the price, in dollars per unit, that producers are willing to accept for x units. Find (a) the equilibrium point, (b) the consumer surplus at the equilibrium point, and (c) the producer surplus at the equilibrium point.D(x)=−65x+13,S(x)=21x+5
Identify Equilibrium Point: Identify the equilibrium point by setting D(x) equal to S(x).Calculation: D(x)=S(x)−65x+13=21x+5Combine like terms:−65x−21x=5−13Convert 21 to 63 to simplify:−65x−63x=−8−68x=−8x = 6
Calculate Equilibrium Price: Calculate the equilibrium price by substituting x=6 into either D(x) or S(x).Calculation:Using D(x):D(6)=−(65)(6)+13=−5+13=8
Calculate Consumer Surplus: Calculate the consumer surplus at the equilibrium point.Consumer surplus is the area between the demand curve and the price level at the equilibrium quantity.Calculation:Consumer Surplus = 0.5×base×heightBase = 6 (equilibrium quantity)Height = 13 (maximum price willing to pay) - 8 (equilibrium price)Consumer Surplus = 0.5×6×(13−8)=0.5×6×5=15
Calculate Producer Surplus: Calculate the producer surplus at the equilibrium point.Producer surplus is the area between the supply curve and the price level at the equilibrium quantity.Calculation:Producer Surplus = 0.5×base×heightBase = 6 (equilibrium quantity)Height = 8 (equilibrium price) - 5 (minimum price willing to accept)Producer Surplus = 0.5×6×(8−5)=0.5×6×3=9
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