Biology Forums - Study Force

Hi there.

This question is asking for consumer surplus. I know the equation is CS = ½ (base) (height), but how do I use that when there is no graph provided?

8. Consider the market for corn. The supply of corn (m millions to bushels) IS given by Qs =2P. The demand for corn is given by Qd = 12 — P. Consumer surplus at the competitive equilibrium is equal to
a. 12
b. 14
c. 16
d. 18
e. It cannot be determined with the data given.

Try 14

Bioman, could you explain to me how you got the consumer surplus and producer surplus?

Well, I only showed/calculated the consumer surplus here, which is 14. I used the Qd and Qs as the x-axis variables (independent variable), and P as the dependent variable. Graphed them both, found the point of intersection. Above that point is the consumer surplus, as shown in the graph, and below is the other.

Does that help?

kind of..like how did you get 14

Each square is 2 units^2. Count all the squares in that region

there are 8 squares

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makes more sense now bio man, the last thing would be how you made the graph using the equation as there are no certain values to plug in.

To make a graph, you need an independent variable and dependent variable.

This of y=x+1 for example. This would form a straight line when graphed

right, so how were the lines formed on your graph? I know this sounds super dumb, but I'm just confused about how I would do it if I were given this question to solve.

Yeah for sure. So remember linear equations are

y=mx+b

For Q=2P, it is the same as x=2y. Solve for y:

y=(1/2)x (here, the slope "m" is 1/2 and the y-intercept is 0)

For Q = 12 - p, it is the same as x=12-y. Solve for y:

y=12-x (here, the slope "m" is -1, and the y-intercept is 12)

Does that make more sense?

Yes that helps Bio man thank you