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Consider a market characterized by the following inverse demand and supply functions:

Px = 40 - 4Qd/x and Px = 10 + 2Qs/x

Determine the following:

Equilibrium price

Equilibrium quantity

Consumer expenditures

Consumer surplus

Producer surplus

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Kritika Krishnakumar
Kritika KrishnakumarLv10
28 Sep 2019

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Related questions

3. Demand, Supply, consumer surplus, and Market Equilibrium. The following relations describe monthly demand and supply conditions in the metropolitan area for recyclable aluminum
QD + 92 - 2Px (Demand)
QS = -16 + Px (Supply)
where Q is a quantity measured in pounds of scrap aluminum and P is the price in dollars.
Complete the following table:
A.
What is the condition for market equilibrium?
B
Calculate the market equilibrium price and equilibrium output?
C.
What is the inverse demand curve P = f (QD)?
D.
Compute the consumer surplus at the equilibrium price.
E.
What is the inverse supply curve P = f (Qs)?
F.
Compute the producer surplus at the equilibrium price.

Consider a market characterized by the following inverse demand and supply functions: PX = 40 - 4QX and PX = 10 + 2QX. Compute the surplus received by consumers and producers. Which is correct?

A. $25 and $25, respectively.

B. $20 and $40, respectively.

C. $40 and $20, respectively.

D. $50 and $25, respectively.

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

a. Find the inverse demand curve.

PX = 200 - 0.5QXd

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

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

$

c. How much consumer surplus do consumers receive when Px = $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.

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