Microeconomics, consumer surplus, etc.

Feb 2019
6
0
NY
Hello. My microecon professor just assigned this homework assignment and I was absent for my last class due to illness. I'm not sure how to go about solving this problem. I understand how to make a general graph and the equilibrium, but not the rest. Any help would be greatly appreciated. BVTfUzR.png
 

HallsofIvy

MHF Helper
Apr 2005
20,249
7,909
Lacking other information I would approximate the the "supply" and "demand" curves are straight lines on a pq coordinate system with p, the price, on the horizontal axis and q, the quantity", on the vertical axis. "Intercept of the supply curve on the p-axis is 10" so the line passes through (10, 0). "The equilibrium price is 30 and the equilibrium quantity is 2000" so the line also passes through (30, 2000). There exist a unique line, with equation q= ap+ b, for some numbers a and b, through those two points. 0= 10a+ b and 2000= 30a+ b. Solve those equations for a and b to determine the supply equation.

Similarly "the intercept of demand curve in the p-axis is 60". So the demand curve passes through (60, 0) and (30, 2000). q= ap+ b with 0= 60a+ b and 2000= 30a+ b. Solve those equations for a and b to determine the demand equation.

Now, do you know what "consumer surplus", "supplier surplus", and "total surplus" mean? Those are not mathematics terms, they are economics terms. They are probably defined in your text book.