Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 6

Use these two supply and demand equations to answer the following questions.
Equation 1:
P = 50 - 4Q
Equation 2:
P = 2 + 2Q
a. What is the equilibrium price? What is the equilibrium quantity?
b. Draw a graph of supply and demand and illustrate the equilibrium.
c. What is the amount of consumer surplus?
d. What is the amount of producer surplus?
e. What is the amount of total surplus?