MAT136H1 Lecture Notes - Economic Surplus, Demand Curve
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MAT136H1 Full Course Notes
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Question #3 (medium): producer surplus given a supply curve. Consumer surplus is how much consumer (ie. buyer) saves when the demand curve lies above the selling price. So it is given by ( )( ) [ ( ) ] number sold. On the other hand from the merchant"s perspective, they gain when the supply curve lies below the selling price. Thus, the producer surplus is given by [ ( )] If the supply function is modeled by the equation , find the producer surplus when the selling price is . Producer surplus is given by [ ( )] function ( ). First the number sold needs to be determined based on the information given. , the number sold is: ; is the number sold at the selling price , given the price. , where is the number sold, only positive works, thus .
