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Questions › JNU › JNU SIS 2015 › Q17
2 marks, −1Microeconomics › Perfect competition › Consumer and producer surplus and deadweight lossModerateabout 2 min

JNU SIS 2015 Question 17: Perfect competition

Suppose that demand in the market for economics books is QD=max⁡{0, 3000−4P}Q_D = \max\{0,\ 3000 - 4P\}QD​=max{0, 3000−4P} and supply is QS=max⁡{0, −1000+12P}Q_S = \max\{0,\ -1000 + 12P\}QS​=max{0, −1000+12P}.

Suppose that demand in the market for economics books is QD=max⁡{0, 3000−4P}Q_D = \max\{0,\ 3000 - 4P\}QD​=max{0, 3000−4P} and supply is QS=max⁡{0, −1000+12P}Q_S = \max\{0,\ -1000 + 12P\}QS​=max{0, −1000+12P}. In market equilibrium, the values of consumer surplus (CS) and producer surplus (PS), respectively are

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Suppose that demand in the market for economics books is Q_D = max {0, 3000 - 4P} and supply is Q_S = max {0, -1000 + 12P}. Suppose that demand in the market for economics books is Q_D = max {0, 3000 - 4P} and supply is Q_S = max {0, -1000 + 12P}. In market equilibrium, the values of consumer surplus (CS) and producer surplus (PS), respectively are (A) CS = 5000; PS = 5000 (B) CS = 40000; PS = 40000/3 (C) CS = 500000; PS = 500000/3 (D) CS = 4000000; PS = 4000000

Perfect competition has come up 115 times in 7 exams since 2006.

What this question tests

This question is on Consumer and producer surplus and deadweight loss, part of Perfect competition in Microeconomics.

Measuring gains from trade in a competitive market and the loss when it is distorted.

TestStop has 15 past-paper questions on this subtopic.

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Question from the JNU SIS 2015 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.