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Consumer & Producer Surplus · Question 39 of 70

Question 39

EasyOriginal question

The demand function is p=40−2xp = 40 - 2 x and the market price is ₹20. What is the consumer surplus?

Options for question 39

Show the answer and explanation
CorrectNot quiteAnswer A

Correct answer: A

Explanation

  1. The market clears at x0=10x_0 = 10, p0=20p_0 = 20.

  2. CS=∫010(40−2x) dx−20×10=300−200=100CS = \int_0^{10} (40 - 2 x)\,dx - 20 \times 10 = 300 - 200 = 100.

Worth noting

₹300 is the area under the whole demand curve; what consumers pay, ₹200, must come off.

Concept
Consumer surplus for a straight-line demand
Typical time
60 s
Your time
—
The rule this testsConsumer surplus
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