Suppose the market demand for good X is given by Q_X^d = 20 - 2P_X. If the equilibrium price of X is $5 per unit then consumers' expenditure on X is

Question

Quizplus · Accepted Answer

To calculate consumers' expenditure, we need to multiply the equilibrium price with the quantity demanded at that price. At a price of $5 per unit, the quantity demanded can be found by setting P = $5 in the demand function: 
Q = 20 - 2($5) = 10

Therefore, consumers' expenditure on X is: 
Expenditure = Price × Quantity 
= $5 × 10 
= $50

Suppose the Market Demand for Good X Is Given by QXd

Suppose the Market Demand for Good X Is Given by Q_X^d