Table 7-11[table]
Price(Dollars per unit) | Quantity Demanded(Units) | Quantity Supplied(Units) 12.00 | 0 | 36 10.00 | 3 | 30 8.00 | 6 | 24 6.00 | 9 | 18 4.00 | 12 | 12 2.00 | 15 | 6 0.00 | 18 | 0
[/table]Refer to Table 7-11. Both the demand curve and the supply curve are straight lines. At equilibrium, total surplus is

Question

Table 7-11​[table]
Price(Dollars per unit) | Quantity Demanded(Units) | Quantity Supplied(Units) 12.00 | 0 | 36 10.00 | 3 | 30 8.00 | 6 | 24 6.00 | 9 | 18 4.00 | 12 | 12 2.00 | 15 | 6 0.00 | 18 | 0
[/table]​​​Refer to Table 7-11. Both the demand curve and the supply curve are straight lines. At equilibrium, total surplus is

BlackTom AI · Accepted Answer

Let's reconstruct the problem from the data given in Table 7-11 to find equilibrium and total surplus.
First, identify the demand and supply relationships from the table. The demand curve shows higher quantity demanded when price is lower, and the supply curve shows higher quantity supplied when price is higher, and both are straight lines.
- Demand data points: at price 12, quantity demanded is 0; at price 0, quantity demanded is 18. A straight-line demand curve goes through (P,Q) = (12,0) and (0,18). The slope is (0 - 18) / (12 - 0) = -18/12 = -3/2. The demand equation in intercept form is Qd = 18 - (3/2)P.
- Supply data points: at price 12, quantity supplied is 36; at price 0, quantity supplied is 0. A straight-line supply curve goes through (P,Q) = (0,0) and (12,36). The slope is (36 - 0) / (12 - 0) = 36/12 = 3. The supply equation is Qs = 3P.
To find equilibrium, set Qd = Qs: 18 - (3/2)P = 3P. This gives 18 = 4.5P, so P = 4. Substituting back into either equation, Q = Qs = 3P = 3*4 = 12.
Now compute total surplus, which is the sum of consumer surplus (CS) and producer surplus (PS).
- Consumer surplus is the area under the demand curve and above the price, from Q = 0 to Q = 12. The highest price a consumer would be willing to pay when Q = 0 is the intercept of the demand curve, which is P = 12. The price at equilibrium is P = 4, so the vertical height of the CS triangle is 12 - 4 = 8, and the base is 12 units. CS = (1/2) * base * height = (1/2) * 12 * 8 = 48.
- Producer surplus is the area above the supply curve and below the price, from Q = 0 to Q = 12. The supply curve is P = Q/3, so at Q = 0 the price is 0, and at Q = 12 the equilibrium price is P = 4. The height of the PS triangle is 4 - 0 = 4, and the base is 12 units. PS = (1/2) * base * height = (1/2) * 12 * 4 = 24.
Total surplus equals CS + PS = 48 + 24 = 72. Therefore, at equilibrium the total surplus is 72 dollars.
Note: If you consider the given multiple-choice options, this calculation corresponds to a total surplus of 72 dollars, derived from the equilibrium price and quantity and the respective areas under the demand and above the supply curves.

View Explanation

Log in for full answers

Similar Questions

Question at position 6 What are the values of total surplus before and after tax imposition?(TS0=10.5,TS1=6)\left(TS^0=10.5,TS^1=6\right)(TS0=12.5,TS1=10)\left(TS^0=12.5,TS^1=10\right)(TS0=13.5,TS1=12)\left(TS^0=13.5,TS^1=12\right)(TS0=15,TS1=10.5)\left(TS^0=15,TS^1=10.5\right)

Table 7-11[table] Price(Dollars per unit) | Quantity Demanded(Units) | Quantity Supplied(Units) 12.00 | 0 | 36 10.00 | 3 | 30 8.00 | 6 | 24 6.00 | 9 | 18 4.00 | 12 | 12 2.00 | 15 | 6 0.00 | 18 | 0 [/table]Refer to Table 7-11. At a price of $2.00, total surplus is

Moving production from a high-cost producer to a low-cost producer will

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler

View Explanation

Log in for full answers

Similar Questions

Question at position 6 What are the values of total surplus before and after tax imposition?(TS0=10.5,TS1=6)\left(TS^0=10.5,TS^1=6\right)(TS0=12.5,TS1=10)\left(TS^0=12.5,TS^1=10\right)(TS0=13.5,TS1=12)\left(TS^0=13.5,TS^1=12\right)(TS0=15,TS1=10.5)\left(TS^0=15,TS^1=10.5\right)

Table 7-11​[table] Price(Dollars per unit) | Quantity Demanded(Units) | Quantity Supplied(Units) 12.00 | 0 | 36 10.00 | 3 | 30 8.00 | 6 | 24 6.00 | 9 | 18 4.00 | 12 | 12 2.00 | 15 | 6 0.00 | 18 | 0 [/table]​​​Refer to Table 7-11. At a price of $2.00, total surplus is

Moving production from a high-cost producer to a low-cost producer will

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

More Practical Tools for Students Powered by AI Study Helper

Making Your Study Simpler

Table 7-11[table] Price(Dollars per unit) | Quantity Demanded(Units) | Quantity Supplied(Units) 12.00 | 0 | 36 10.00 | 3 | 30 8.00 | 6 | 24 6.00 | 9 | 18 4.00 | 12 | 12 2.00 | 15 | 6 0.00 | 18 | 0 [/table]Refer to Table 7-11. At a price of $2.00, total surplus is