The market demand function for ice cream is Q^d = 10- 2P and the market supply function for ice cream is Q^s = 4P-2 , where both quantities are measured in millions of gallons per year. What is the aggregate surplus at the competitive market equilibrium? A) $4.2 B) $16.8 C) $8.4 D) $9

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To find the competitive market equilibrium, we set the demand function equal to the supply function and solve for P (price). Demand: $10 - 2P$Supply: $4P - 2$Setting them equal: $10 - 2P = 4P - 2$Solving for P: $10 + 2 = 4P + 2P$$12 = 6P$$P = 2$Substitute P back into either the demand or supply function to find Q (quantity):$Q = 10 - 2(2) = 6$ million gallonsTo find the aggregate surplus, we calculate the consumer surplus (CS) and producer surplus (PS).CS is the area above the price and below the demand curve, from 0 to Q:$CS = \frac{1}{2} \times (10 - 2) \times 6 = 24$PS is the area below the price and above the supply curve, from 0 to Q:$PS = \frac{1}{2} \times 2 \times 6 = 6$Aggregate surplus = CS + PS = $24 + 6 = 30$However, the calculation provided does not match any of the options given, indicating a mistake in the interpretation of the question's request for "aggregate surplus" as it was calculated. The correct approach should involve finding the equilibrium, then calculating the area of consumer and producer surplus directly based on the equilibrium price and quantity, but it seems there was a misunderstanding in the calculation process. Given the options and the typical method of calculating surplus, none of the provided answers directly align with the standard calculation of aggregate surplus from the given demand and supply equations. The correct approach would involve finding the equilibrium price and quantity, then calculating the consumer and producer surplus based on these values. However, without the correct method to calculate the aggregate surplus directly from the given options, the response provided does not accurately reflect a standard economic calculation for aggregate surplus based on the provided demand and supply functions.

The Market Demand Function for Ice Cream Is Qd =

The Market Demand Function for Ice Cream Is Q^d =