Suppose that the demand curve for an advanced technology product for businesses is given by P =10,000 - 4Q³ and supply is P = 2,000 + 4Q³. The consumer surplus at the equilibrium price is ____. A) $6,000 B) $10 C) $70,000 D) $30,000

Question

Quizplus · Accepted Answer

To find the consumer surplus, first find the equilibrium quantity where demand equals supply: 10,000 - 4Q^3 = 2,000 + 4Q^3. Solving gives Q = 10. The equilibrium price is P = 10,000 - 4(10)^3 = 6,000. Consumer surplus is the area under the demand curve above the price level up to the equilibrium quantity: (1/2) * (10,000 - 6,000) * 10 = $20,000.

Suppose That the Demand Curve for an Advanced Technology Product