9115g M 128 F 20
. HW 6.3 due 9/18
• Assigned HW G. 4 due 9/23
. READ Section G. 5 for Thursday
( Present and Future Value )
• Moodle" Quiz
" 9124
.Moodle ExamI.to/II
Review Material
Posted 9122
6.4 Consumer and Producer Surplus-
A company producesWidgets
q - quantity produced
p- price I unit pig ) SG )
Sfg ) - supply carve c producer)••
Dlg) - demand carve C consumer )
marketers : ( g't, pit)
SurptusC9
't,p* ) equilibrium-
( Slg ) intersectsDG )
-
g-
Consumer Surplus is
an AREA in units$ pay 519 )
- p - so
?:"aEEa"units¥¥#.9.pe# 1%7*4A
ai
Exe: Producing Widgets
d) what are the equilibrium
pniceaudguantity.eetoo {
( 9 't, p
't ) = ( soooo ,so )
↳¥%€•q,✓ got G)
by At the equilibrium price ,calculate the consumer
and producer surplus ?
Consumer Surplus = Area of D= I ' 80000 . 160 =6,400,0001€
Producer
ftp.Areaof. so
.-23,20900081JTotal Surplus = 9,600,000 $
computingconsumerandpno-dcer.rs ( equilibrium )
consumer.id¥¥
" "
Surplus o DG )= Sitting)dg -
59*13*49o
=s:ty**a- Slg )i¥,
DID
Exe : Suppose Dig) = 35-92 and Slg ) = 3+9 ?
Find the
PR0#RSURPLUS
when the market
is inp p
"
÷÷:÷÷÷÷÷÷÷÷÷÷:*::*:÷¥¥÷:24*5=32 ⇒ 9*5=16
⇒ g*= I 4 or It I 't
P : p't
-- SGT -
-3+42=19
-
P't
= Dlgxy = 35 - y :p/ l 959*7=64,19)
-
Equilibrium
Ps:{anger .es?p*-sasdq= So
"
Iq - (
3+9749=5.
"
is -92dg dog- If ) !"
= ( 16.4 - I -43) - ( Iso - f. 03)
= 64 - 043 - O = 192564--1231=4243
or $42
ArtificialPriceContro# . Suppose *is IMPOSEDone can also look p
-
L p't
AF%•¥ DIEWE← is
Consumer Surplus In GENERAL the
i#/P:;duwmoE¥'
with price Controlswithout price controls
--
* pl7et¥market in Eeailioniu ,
Bakshi.
'
¥E¥*¥when a price control is imposedlessen a specific Economic Problem # the overall
economy LOSEL
Exe : Suppose a price control of
ptis imposed
in the scenario in the graph .
a) what is 9T ?
•↳b) what is the consumer
pt.no#//EqC9TPt
)
and Producer Surplus ④•• 197¥09
in this artificial situation. #I >q ooo G)
A 80
a Compare the surplusesto the case where the market is in equilibrium
.
( next page )
a)
Tyto,
DG ) ?
Dlg ) = mg to a line
%:!:! ,
m-- anti -71¥01=240 ( just look at the graph )
⇒ Dlg ) =- ¥0 g
t 240
100 =D Gt ) =
- ¥0 . 9tt 240
⇒ gt , 101%2,42= 140.500 = 70(gtG¥
-
d)E:Y -
- S!'t
Diet - p't da EI an→
Bat we have PRICE CONTROLS
CELIE =1943197 - ptdq
= § og +240 ) - 100 49
TEE Area of triangle= I . 70000 . 140 =
Zoeee.
Zo=$4900,00072$kyotfY
Producer Surplus
ftp.scqsdq-S?7oo-ctoooasdqTO ,
000
= 1009 - 2¥92 to
= 100.70 ,ooo
- ÷ . Ko, ooo )"
= #
