SOLUTION: please help me solve this. Consider the market demand and the supply functions as Demand: P=500-25Q and Supply: P=50+20Q. i) Calculate the equilibrium price and Quantity [ 5

Question 1195938: please help me solve this.
Consider the market demand and the supply functions as Demand: P=500-25Q and Supply:
P=50+20Q.
i) Calculate the equilibrium price and Quantity [ 5 marks]
ii) Calculate the consumers’ and producers’ surplus [ 5 marks]
Answer by MathLover1(20849) (Show Source): You can put this solution on YOUR website!

Demand:
Supply:

i) Calculate the equilibrium price and Quantity
An equilibrium price, also known as a market-clearing price, is the consumer cost assigned to some product or service such that supply and demand are , or close to equal.

so Quantity is
and the equilibrium price is

ii) Calculate the consumers’ and producers’ surplus

Consumer Surplus:
Consumer Surplus=
Consumer Surplus=

Producer Surplus:
Producer Surplus=
Producer Surplus=

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