Suppose That the Market Demand Curve for Residential Water Is

Essay

Suppose that the market demand curve for residential water is given by
Q^D = 10 - 2.25P
and the market supply curve is given by
Q^S = -10 + 2.75P
where the quantity is measured in millions of gallons per month and the price is in dollars per thousand gallons.
a. Calculate the equilibrium price and quantity.
b. Calculate the consumer surplus at the equilibrium price.