ECON 103 Lecture Notes - Lecture 5: Economic Surplus, Economic Equilibrium

1324 views5 pages

Document Summary

sh: amy has a demand function for apples given by q = 200 20p, graph and calculate her mwtp (or mb) and twtp (or tb) at a quantity of 60 apples. Twtp = tb = 60 $ (10 + 7) = : calculate amy"s consumer surplus (cs) if the price of apples is . 50. Tc = 20 $ (0. 2 + 1. 2) = : calculate ivy"s producer surplus (ps) if the price of apples is . 50. Ps = 26 $ (1. 5 - 0. 2) = . 9: if the price of apples remains at . 50, but ivy"s mc of producing apples decreases by 20 percent. New supply curve: mc = (1 0. 20) (0. 2 +0. 05q) p = 0. 16 + 0. 04 q. Ps = 33. 5 $ (1. 5 - 0. 16) - 26 $ (1. 5 - 0. 2) = . 545: a friend of yours is considering two cell phone service providers. Provider a charges per month for the service regardless of the number of phone calls made.