The demand curve for product X is given by Q X d = 480 - 2P X . a. Find the inve

Question

The demand curve for product X is given by QXd = 480 - 2PX.

a. Find the inverse demand curve.

Instruction: Enter all values as integers, or if needed, as a decimal.

PX =  -  QXd

Instructions: Enter your responses to the nearest penny (two decimal places).

b. How much consumer surplus do consumers receive when Px = $50?

$

c. How much consumer surplus do consumers receive when Px = $30?

$

d. In general, what happens to the level of consumer surplus as the price of a good falls?

The level of consumer surplus  (Click to select)  doesn't change  decreases  increases  as the price of a good falls.

Explanation / Answer

a- inverse demand curve is when the price becomes the dependent variable

PX = 240-0.5QX

B- NOW CONSUMER SURPLUS IS THE AREA ABOVE THE PRICE AND BELOW THE DEMAND CURVE

AT P = 50 Q= 380

CS = 0.5(240-50)(380) = 36100

C- AT P = 30 Q = 420

C.S = 0.5(420)(210) = 44100

D- NOW AS PRICES FALL THE CONSUMER SURPLUS INCREASES AS IT BENEFITS THE CONSUMER AND AREA ABOVE THE PRICE AND BELOW THE DEMAND CURVE INCREASES.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.