Market demand is given as Q_D= 60 - 3P.Market supply is given as Q_S= 3P.In a perfectly competitive equilibrium,what will be the value of producer surplus

Question

Quizplus · Accepted Answer

In a perfectly competitive equilibrium, market supply (QS1U1B1S) equals market demand (QS1U1B1D). Therefore,

60 - 3P = 3P

Solving for P, we get:

P = 10

Substituting P in either the supply or demand function, we get:

QS1U1B1D = 30 
QS1U1B1S = 30

Therefore, producer surplus is:

(10 - 0.5 x 10) x 30 = $150

Option C is the correct answer.

Market Demand Is Given as QD = 60 - 3P

Market Demand Is Given as Q_D= 60 - 3P