Homework SourseGiven the following supply and demand functions sx 4x 2 dx
Given the following supply and demand functions:
s(x) = 4x + 2
d(x) = -3x + 9
...find the consumer\'s surplus.
...find the producer\'s surplus.
s(x) = 4x + 2
d(x) = -3x + 9
...find the consumer\'s surplus.
...find the producer\'s surplus.
Solution
When we draw the supply demand curve, the area under the graph before equilibrium is the economic surplus which is further divided into consumer surplus and producer surplus. Consumer surplus = 1/2 * (9 - 6) * 1 = 1.5 units Producer surplus = 1/2 * (6 - 2) * 1 = 2 units
