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Imagine the market for Good X has a demand function of QDX = 40 – PX and a supply function of QSX = 2PX – 20. Suppose the current price of Good X (PX) is 30.
Calculate consumer surplus (CS).
CS = ________
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Respuesta :

kirabowen15
Good X

Demand function QDX = 40 - PX
Supply function QSX = 2PX - 20

Current price Good X (PX) = 30

Calculate the consumer surplus (CS)

QDX = 40 - 30
= 10

QSX = 2(30) - 20
= 60 - 20
= 40

If the quantity supplied is 40 and the quantity demanded is 10 then consumer surplus is 30.

CS = QSX - QDX
= 40 - 10
= 30
chilljain33

The correct statement is that the consumer surplus for the information given above will be calculated as 30 for the Good X.

The calculation of the Consumer Surplus can be done by applying the given information to the formula of consumers surplus.

Calculation of consumer surplus

  • Demand function is given as  [tex]\rm QDX= 40-PX[/tex]

  • Supply function is given as  [tex]\rm QSX= 2x-20[/tex] and the price of Good X is 30, so the calculation of these values will be done as below,

  • [tex]\rm QDX= 40-30\\\\\rm QDX=10[/tex]

  • and calculating further,

  • [tex]\rm QSX = 2(30)-20\\\\\rm QSX= 60-20\\\\\rm QSX= 40[/tex]

  • The derived values will be applied to the formula for the consumer surplus to calculate the surplus for the Good X at the current price of 30 as below,

  • [tex]\rm Consumer\ Surplus= QSX-QDX\\\\\rm Consumer\ Surplus = 40-10\\\\\rm Consumer\ Surplus\ =30[/tex]

  • So, the consumer surplus is calculated as 30.

Hence, the correct statement is that the consumer surplus for Good X at the current market price of 30 is calculated as 30.

Learn more about consumer surplus here:

https://brainly.com/question/18439680