Assume the inverse demand function for a good can be written as: P = 30 - 2Q.Assuming P = $10,the resulting consumer surplus would be equal to:
A)$50.
B)$100.
C)$200.
D)$225.

Question

Quizplus · Accepted Answer

When P = $10, we can substitute this into the demand function to find the corresponding quantity:

$10 = 30 - 2Q

Solving for Q, we get Q = 10.

To find the consumer surplus at this price, we need to calculate the area under the demand curve above the price ($10) and up to the quantity (10):

Consumer Surplus = 0.5 * ($30 - $10) * 10

Consumer Surplus = $100

Therefore, the consumer surplus at a price of $10 is $100. The correct answer is option B.

Assume the Inverse Demand Function for a Good Can Be