Suppose the domestic supply (Q^S) and demand (Q^D) for skateboards in the United States are given by the following set of equations: $$\begin{array} { l } Q ^ { 5 } = - 60 + 3 P \ Q ^ { D } = 390 - 2 P \end{array}$$ In the absence of trade with the rest of the world, the consumer surplus in the United States skateboard market equals _____ and the producer surplus equals_____. A)$7,050; $11,525 B)$31,500; $9,450 C)$20,474; $7,350 D)$11,025; $7,350

Question

Quizplus · Accepted Answer

To find consumer and producer surplus, first find the equilibrium price and quantity by setting Q^S = Q^D: -60 + 3P = 390 - 2P, solving gives P = 90, Q = 210. Consumer surplus is the area of the triangle above the price and below the demand curve: 0.5 * (390 - 210) * (135 - 90) = $11,025. Producer surplus is the area of the triangle below the price and above the supply curve: 0.5 * (210 - 0) * (90 - 20) = $7,350.

Suppose the Domestic Supply (QS) and Demand (QD) for Skateboards Q5=−60+3PQD=390−2P\begin{array} { l } Q ^ { 5 } = - 60 + 3 P \\Q ^ { D } = 390 - 2 P\end{array}Q5=−60+3PQD=390−2P​

Suppose the Domestic Supply (Q^S) and Demand (Q^D) for Skateboards $\begin{array} { l } Q ^ { 5 } = - 60 + 3 P \\Q ^ { D } = 390 - 2 P\end{array}$