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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)=-(5)/(6)x+13,S(x)=(1)/(2)x+5

D(x) \mathrm{D}(\mathrm{x}) is the price, in dollars per unit, that consumers are willing to pay for x \mathrm{x} units of an item, and S(x) \mathrm{S}(\mathrm{x}) is the price, in dollars per unit, that producers are willing to accept for x \mathrm{x} units. Find (a) the equilibrium point, (b) the consumer surplus at the equilibrium point, and (c) the producer surplus at the equilibrium point.\newlineD(x)=56x+13,S(x)=12x+5 D(x)=-\frac{5}{6} x+13, S(x)=\frac{1}{2} x+5

Full solution

Q. D(x) \mathrm{D}(\mathrm{x}) is the price, in dollars per unit, that consumers are willing to pay for x \mathrm{x} units of an item, and S(x) \mathrm{S}(\mathrm{x}) is the price, in dollars per unit, that producers are willing to accept for x \mathrm{x} units. Find (a) the equilibrium point, (b) the consumer surplus at the equilibrium point, and (c) the producer surplus at the equilibrium point.\newlineD(x)=56x+13,S(x)=12x+5 D(x)=-\frac{5}{6} x+13, S(x)=\frac{1}{2} x+5
  1. Identify Equilibrium Point: Identify the equilibrium point by setting D(x)D(x) equal to S(x)S(x).\newlineCalculation: \newlineD(x)=S(x)D(x) = S(x)\newline56x+13=12x+5-\frac{5}{6}x + 13 = \frac{1}{2}x + 5\newlineCombine like terms:\newline56x12x=513-\frac{5}{6}x - \frac{1}{2}x = 5 - 13\newlineConvert 12\frac{1}{2} to 36\frac{3}{6} to simplify:\newline56x36x=8-\frac{5}{6}x - \frac{3}{6}x = -8\newline86x=8-\frac{8}{6}x = -8\newlinex = 66
  2. Calculate Equilibrium Price: Calculate the equilibrium price by substituting x=6x = 6 into either D(x)D(x) or S(x)S(x).\newlineCalculation:\newlineUsing D(x)D(x):\newlineD(6)=(56)(6)+13=5+13=8D(6) = -\left(\frac{5}{6}\right)(6) + 13 = -5 + 13 = 8
  3. Calculate Consumer Surplus: Calculate the consumer surplus at the equilibrium point.\newlineConsumer surplus is the area between the demand curve and the price level at the equilibrium quantity.\newlineCalculation:\newlineConsumer Surplus = 0.5×base×height0.5 \times \text{base} \times \text{height}\newlineBase = 66 (equilibrium quantity)\newlineHeight = 1313 (maximum price willing to pay) - 88 (equilibrium price)\newlineConsumer Surplus = 0.5×6×(138)=0.5×6×5=150.5 \times 6 \times (13 - 8) = 0.5 \times 6 \times 5 = 15
  4. Calculate Producer Surplus: Calculate the producer surplus at the equilibrium point.\newlineProducer surplus is the area between the supply curve and the price level at the equilibrium quantity.\newlineCalculation:\newlineProducer Surplus = 0.5×base×height0.5 \times \text{base} \times \text{height}\newlineBase = 66 (equilibrium quantity)\newlineHeight = 88 (equilibrium price) - 55 (minimum price willing to accept)\newlineProducer Surplus = 0.5×6×(85)=0.5×6×3=90.5 \times 6 \times (8 - 5) = 0.5 \times 6 \times 3 = 9

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