Question

A supply function indicates the number of units of a commodity that suppliers are willing to bring to the marketplace as a function of the price consumers are willing to pay. The following function is the supply function
qs = 0.5p^2 – 200
where qs equal no. of units supplied (stated in thousands) and p equals the selling price.

a. What class of function is this?
b. What quantity would be supplied if the market price is $30? $50?
c. What price would result in 0 units being brought to the marketplace?​

Answer 1

Answer:

The area of the dotted triangle (representing producer surplus) is calculated as ½ x base x height, with the base of the triangle being the equilibrium quantity (QE) and the height being the equilibrium price (PE). “Total surplus” refers to the sum of consumer surplus and producer surplus.