Let the market for Tennis racquets be: Quantity demanded & market price quantity

Question

Let the market for Tennis racquets be:

Quantity demanded & market price                 quantity supplied & market price

                        0                      100                                          0                      40                   

                        25                    80                                            15                    50

                        40                    50                                            25                    80

a. What is the total purchase of tennis racquets? Why?

b. What is the consumer surplus? Why?

c. What is the increase in consumer surplus when the market price drops to $ 50?

d. What is the increase in producer surplus when the market jumps to 80?

f. Deduce and explain the total surplus

Explanation / Answer

a) 25, as at this price demand = supply.

b) .5*25*80

c) the consumer surplus increases.

d) the loss in consumer surplus is the increase in producer surplus.

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