The supply and demand curves for a product are as follows. What is consumer surplus in this market? Q D = 15 - 2P Q S = -15 + P

All right, let's try this practice problem here. The supply and demand curves for a product are as follows. What is consumer surplus in this market? Alright, so notice they're asking us only for consumer surplus, not both, so we're actually gonna be able to skip a little bit of the work, but we're still gonna have to do most of it, But let me go ahead and show you on the graph I'm gonna draw over in this this section here. Alright. So just gonna do our standard supply and demand graph. Right? And we're gonna be at equilibrium here at p star and q star. And you remember that discussion about the axis prices, right? We're gonna need the axis price to calculate consumer surplus and producer surplus, but when we're doing consumer surplus we only need the demand access price, we only need the one that's up here, right? We don't need the supply access access price, we only use that for the producer surplus. So all we need is demand access price. It's gonna save us at least a little time. Let's start off by doing step 1 where we're gonna solve, for equilibrium, right? We've got quantity demanded and quantity supplied on the same side of the equation so they're already isolated for us. We're just gonna set them equal to each other. 45 minus 2p equals negative 15+p. Okay. So now we just need to solve for p. Let's isolate p P and find out what it is. This is gonna be our equilibrium price. So if we add 15 to both sides and if we add 2p to both sides, right, we want to get the p's all on one side and the numbers all on the other side. So this is going to cancel out. This is going to cancel out. What's left? 45 +15 is 60. P+2p is 3p. So what are we gonna have? We divide both sides by 3, and we're left with p equals 20, right? Our equilibrium price in this case is going to be equal to 20, so on our graph, I'm gonna erase this p star right here and I'm gonna write 20 in its place. So let's go ahead and find the equilibrium quantity at this price of 20 and remember you can use either equation to find the equilibrium quantity. The quantity supplied equation looks way easier so I'm gonna use that one. So quantity supplied which is the equilibrium quantity at equilibrium, is gonna equal negative 15+p, right? And p in this case is 20. So negative 15 plus 20. Let me just do that math real quick. I can do that one in my head. Q star is gonna equal 5, right? So I'm gonna erase this right here and I'm gonna put 5. So at equilibrium, our price is 20 and our quantities exchanged, our quantity supplied and quantity demanded is 5. Last thing we need is this demand access price up here, right And then we can calculate the consumer surplus. So how do we find that? We need to set demand for quantity. Quantity demanded equal to 0, right? If you think about that right, this is 0 right here, so at a price or yeah, at a quantity of 0, what is the price? Right? So let's go ahead and do that. So we'll use our quantity demanded equation and we're gonna set quantity demanded equal to 0. So the left hand is 0 equals 45 minus 2p. Let's go ahead and add 2p to both sides and we're gonna get 2p equals, this cancels, 45. So p is gonna equal, we're gonna divide both sides by 2. Sorry. Let me skip a step there. Divide by 2 divide by 2 and we're gonna get p equals 22.5 right? So the maximum price, that demand access price is going to be 22.5 up here. So knowing all of this, we're ready to calculate this triangle, right? So our consumer surplus is going to be this area above equilibrium price, but below the demand curve. Right? So let's go ahead and do that. Our base is going to be this area this length right here between 22.520 and our height is going to be this side right here, the 5 quantity demanded. Right, so let's go ahead and do it. Area equals half times base times height. So the area is going to equal half times the base in this case is the difference between that demand axis price and our equilibrium price, right? That's going to be the length of that segment. 22.5-twenty and our height is going to be that equilibrium quantity of 5 right? From 0 to 5 is a length of 5. Cool. So all we gotta do is this final math and we are going to be set. Half times 2.5 times 5. Let me go ahead and pull out my calculator. 0.5 times 2.5 times 5. That's what I thought. 6.25. Okay. So our area is 6.25 right there and that is going to be our consumer surplus and that's the answer to this question right here. So the answer is a: 6.25. Cool? Alright. Let's move on to the next one.

The supply and demand curves for a product are as follows. What i...

0. Basic Principles of Economics1h 5m

1. Reading and Understanding Graphs59m

2. Introductory Economic Models1h 10m

3. The Market Forces of Supply and Demand2h 26m

4. Elasticity2h 16m

5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m

6. Introduction to Taxes and Subsidies1h 46m

7. Externalities1h 12m

8. The Types of Goods1h 13m

9. International Trade1h 16m

10. The Costs of Production2h 35m

11. Perfect Competition2h 23m

12. Monopoly2h 13m

13. Monopolistic Competition1h 9m

14. Oligopoly1h 26m

15. Markets for the Factors of Production1h 33m

16. Income Inequality and Poverty35m

17. Asymmetric Information, Voting, and Public Choice39m

18. Consumer Choice and Behavioral Economics1h 16m

The supply and demand curves for a product are as follows. What is consumer surplus in this market?
Q_D = 15 - 2P
Q_S = -15 + P

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The supply and demand curves for a product are as follows. What is consumer surplus in this market? QD = 15 - 2PQS = -15 + P

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The supply and demand curves for a product are as follows. What is consumer surplus in this market?
Q_D = 15 - 2P
Q_S = -15 + P