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demand model to show a consumer surplus that reflects a demand curve that hits the y-axis at $300 and a market price and Q at $%0 and 50,000 units is $7.5 million

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 model to show a consumer surplus that reflects a demand curve that hits the y-axis at $300 and a market price and Q at $%0 and 50,000 units is $7.5 million

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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