Essay
Consider the market for a Procter and Gamble biodegradable detergent. Suppose that market demand is QD = 120 - 3P, and market supply is QS = -50 + 2P, where P is the price per case and Q is the quantity in thousands per week.
a. Find equilibrium quantity and price.
b. What is the value of consumer surplus (CS) and producer surplus (PS) at equilibrium?
c. If each case of detergent were sold at $30, determine the amount of the shortage or surplus that would result.
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1a. Equilibrium price for the bio-degrad...View Answer
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