The demand function for a commodity is $p= 35-2x-x^2$, then the consumer's surplus at equilibrium price $p_0 = 20$ is |
20 24 27 28 |
27 |
The correct answer is Option (3) → 27 ** Demand function: $p = 35 - 2x - x^{2}$ Equilibrium price: $p_{0} = 20$ Find equilibrium quantity: $20 = 35 - 2x - x^{2}$ $x^{2} + 2x - 15 = 0$ $x = 3$ (positive root) Consumer surplus: $CS = \int_{0}^{3} (35 - 2x - x^{2})\,dx - p_{0}x_{0}$ $\int (35 - 2x - x^{2})\,dx = 35x - x^{2} - \frac{x^{3}}{3}$ Evaluate from $0$ to $3$: $= 35(3) - 9 - \frac{27}{3}$ $= 105 - 9 - 9$ $= 87$ Now subtract $p_{0}x_{0} = 20 \times 3 = 60$ $CS = 87 - 60 = 27$ The consumer’s surplus is $27$. |