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 the total value a consumer receives from consuming the equilibrium quantity is:

Question

Quizplus · Accepted Answer

To find the total value a consumer receives from consuming the equilibrium quantity, we need to use the formula:

Total value = Price x Quantity

At equilibrium, the price of X is $5 per unit. To find the equilibrium quantity, we need to set the demand equal to the supply and solve for Q:

20 - 2P = P
20 = 3P
P = $6.67
Q = (20 - 2P)/3
Q = 4.44

So the equilibrium quantity is 4.44 units.

Therefore, the total value received by the consumer is:

Total value = Price x Quantity
Total value = $5 x 4.44
Total value = $22.22

So the correct answer is B) $75.

Suppose the Market Demand for Good X Is Given by QXd

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