Find consumer surplus in dollars

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Assume that the market demand for broccoli is given through Q=1000-5P and the market supply of broccoli is given through Q=4P-80 where Q is quantity per year measured in hundreds of bushels an P is price in dollars per hundred bushels.

a. Determine the equilibrium price/quantity combination
b. How much in total is spent on broccoli?
c. Find consumer surplus in dollars at this equilibrium?
d. What is producer surplus in dollars at this equilibrium?
e. Graph your results

2. Since the federal government believes a diet with broccoli included is good, it decides to subsidize the price paid by the buyer. The subsidy is $45.

a. Find the new equilibrium price/quantity combination (Remember: Pb=Ps-S).
b. What is the total subsidy in dollars?
c. How much in total dollars is spent on buyers on broccoli?
d. What is the deadweight loss in dollars?
e. Graph your results?

 

Reference no: EM1374598

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