Answer to Question #25298 in Microeconomics for Lency Chiles

Question

1. The market supply and demand for one type of GPS are given by the following equations.
P Qd = 900 − 0.2 P Qs = 300 + 0.1
a. What is equilibrium quantity?
b. What is equilibrium price?
c. Graph supply demand. Label equilibrium and show CS and PS
d. Calculate Consumer and Producer Surplus
2. Define efficiency.
3. What happens to Consumer surplus as price goes up? Illustrate below.
4. What happens to Producer Surplus as price goes up? Illustrate below.