Question

The demand function of blankets at COMESA is given by the equation P=60-2Q find the units of good Q ,when P=12 and use integration to calculate the consumer surplus

Answer 1

a. 24

b. 864

Explanation:

a. The demand function is:

P = 60 - 2Q

When P = 12:

12 = 60 - 2Q

2Q = 60 - 12

2Q = 48

Q = 48/2 = 24

b. Consumer surplus is given as the integral of Demand function:

`CS = \int\limits {[P(Q) - (p)(Q)] \ dQ\\`

This implies that:

`CS = \int\limits {60 - 2Q} \, dQ\\\\CS = 60Q - Q^2\\\\CS = (60 * 24) - 24^2\\\\CS = 1440 - 576\\\\CS = 864`