Answer in Macroeconomics for Hafsa #197979

Suppose the following demand and supply function:

Qd = 750 – 25P

Qs = -300 + 20 P

      i.         Find the equilibrium price and quantity

    ii.         Find consumer and producer surplus









(ii) consumer/producer surplus“=\frac{1}{2}\times base\times height”

 Ps and Pd are also calculated at points where quantity demanded and supplied are 0. 









The consumer and producer surplus are then calculated as follows

consumer surplus




producer surplus