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Demand is D = 50 – p and supply is S = p. Calculate Consumer Surplus when a Price Ceiling is introduced at p = 10.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Demand is D = 50 – p and supply is S = p. Calculate Consumer Surplus when a Price Ceiling is introduced at p = 10. Round final answers to 2 decimal places.

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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