Suppose the market demand for TV remotes is given by the equation Q_d = 100 - 2P,where P is the price and Q_d is the number of TV remotes.If the market price of TV remotes is $40,then the quantity demanded equals _____ and the value of consumer surplus is _____. A)20;$100 B)100;$20 C)40;$200 D)2;$40

Question

Quizplus · Accepted Answer

If the price of a TV remote is $40, we can plug this value into the demand equation to find the quantity demanded: Q_d = 100 - 2P Q_d = 100 - 2($40) Q_d = 20 Therefore, the quantity demanded is 20 TV remotes. To find consumer surplus, we need to find the area below the demand curve and above the price paid by consumers (which in this case is $40). Since this is a rectangular demand curve, we can use the formula for the area of a rectangle to find consumer surplus: Consumer Surplus = (Price Paid by Consumers - Lowest Possible Price) x Quantity Demanded / 2 Consumer Surplus = ($40 - $0) x 20 / 2 Consumer Surplus = $400 / 2 Consumer Surplus = $200 Therefore, the value of consumer surplus is $200. Choice A is the correct answer.

Suppose the Market Demand for TV Remotes Is Given by the Equation