The demand curve for product X is given by Q X d = 480 - 2P X . a. Find the inve
ID: 1104760 • Letter: T
Question
The demand curve for product X is given by QXd = 480 - 2PX.
a. Find the inverse demand curve.
Instruction: Enter all values as integers, or if needed, as a decimal.
PX = - QXd
Instructions: Enter your responses to the nearest penny (two decimal places).
b. How much consumer surplus do consumers receive when Px = $50?
$
c. How much consumer surplus do consumers receive when Px = $30?
$
d. In general, what happens to the level of consumer surplus as the price of a good falls?
The level of consumer surplus (Click to select) doesn't change decreases increases as the price of a good falls.
Explanation / Answer
a- inverse demand curve is when the price becomes the dependent variable
PX = 240-0.5QX
B- NOW CONSUMER SURPLUS IS THE AREA ABOVE THE PRICE AND BELOW THE DEMAND CURVE
AT P = 50 Q= 380
CS = 0.5(240-50)(380) = 36100
C- AT P = 30 Q = 420
C.S = 0.5(420)(210) = 44100
D- NOW AS PRICES FALL THE CONSUMER SURPLUS INCREASES AS IT BENEFITS THE CONSUMER AND AREA ABOVE THE PRICE AND BELOW THE DEMAND CURVE INCREASES.