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Suppose That the Market Demand Curve for Residential Water Is

Question 126

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Suppose that the market demand curve for residential water is given by
QD = 10 - 2.25P
and the market supply curve is given by
QS = -10 + 2.75P
where the quantity is measured in millions of gallons per month and the price is in dollars per thousand gallons. Calculate the producer surplus at the equilibrium price.

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