Question

The demand curve for product X is given by QXd = 400 - 2PX.

a. Find the inverse demand curve.

P_X = 200 - 0.5Q_X^d

Instructions: Round your answer to the nearest penny (2 decimal places).

b. How much consumer surplus do consumers receive when P_x = $40?

$

c. How much consumer surplus do consumers receive when P_x = $30?

$

d. In general, what happens to the level of consumer surplus as the price of a good falls?

The level of consumer surplus "increases" as the price of a good falls.