Demand curve to estimate the consumer surplus, Operation Management

Assignment Help:

Demand curve to estimate the consumer surplus:

Adam's demand curve for commodity X is: XA = 10 - 2Px . Betty's demand curve for commodity X is: XB = 10 - 3Px .

(a) What is the market demand curve for commodity X.

(b) Draw the three demand curves on one graph and compare their slopes.

(c) Assume that the market price of commodity X is $2 per unit. Calculate the point price elasticity of demand for two individual demand curves and for the market demand curve.

(d) If the price is increased slightly from $2, what will happen to the total expenditure on commodity X by Adam and Betty?

(e) Use the market demand curve to estimate the consumer surplus at price equal to $2.


Related Discussions:- Demand curve to estimate the consumer surplus

Explain why is forecasting important for an organization, Why is forecastin...

Why is forecasting important for an organization? Which company do you believe to be successful at forecasting and why?

Describe the difference between consumer products, Explain the difference b...

Explain the difference between consumer products and business products. Why are some products difficult to categorize as one or the other? Give an example of a business product, a

Explain the annual interest payment, A bond has a coupon rate of 15%, a yie...

A bond has a coupon rate of 15%, a yield to maturity of 10.55%, and a market price of $850. Therefore, the annual interest payment is: a.) $850 b.) $150 c.) $105.50. d.) $120.0

Compute the total annual cost, A local nursery, Greens, uses 2184 bags of p...

A local nursery, Greens, uses 2184 bags of plant food annually. Greens works 52 weeks per year. It costs $8 to place an order for plant food. The annual holding cost rate is $2 per

Explain worldwide industry environment, Organizations are structured to tak...

Organizations are structured to take advantage of their inherent strengths and also to minimize their inherent weaknesses. For example, an organization may outsource its purchasing

Explain object oriented database model, The relational database model gaine...

The relational database model gained popularity and many proponents during the 1980's and 1990's, a period of time in which IT organizations were seeking to consolidate data from m

Describe how personal selling can help solve the problem, Explain how perso...

Explain how personal selling can help solve the problem of information overload.

Explain cost-minimizing production schedule, A motorcycle manufacturer is d...

A motorcycle manufacturer is determining its production schedule for the next 6 months. The cost of manufacturing a motorcycle during each month is Month 1 Month 2 Month 3 Month 4

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd