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14 December, 02:32

The demand function for a certain make of replacement cartridges for a water purifier is given by the following equation where p is the unit price in dollars and x is the quantity demanded each week, measured in units of a thousand.

p = - 0.01x2 - 0.1x + 32

Determine the consumers' surplus if the market price is set at $2/cartridge. (Round your answer to two decimal places.)

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  1. 14 December, 02:49
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    Demand function: p = - 0.01x^2-0.2x+13 (1).

    The equation (2) is: CS = ∫ D (p) dp, where D is the demand curve expressed in terms of the price. The bottom limit of the integrand is the market price given as $5 and the top limit is $13 found by setting x = 0 in (1) above. Equation (2) above requires we solve the original equation, (1) above, for x in terms of p. The first step is (a) to multiply both sides of equation by - 100 to clear decimals, then (b) place equation in standard quadratic form, namely, x^2 + 20x + 100p - 1300 = 0. Step (c) : Solve for x by applying quadratic formula, namely, x = (-b + - √ (b^2 - 4ac)) / 2a to solve for x. Use a = 1, b = 20, c = 100p - 1300. The new demand equation is: x = - 10 + 10√ (14 - p). Now calculate ∫ (-10 + 10 (14 - p) ^ (1/2)) dp and evaluate at 5 and 13. This gives: - 10 (13 - 5) - (2/3) (10) ((14 - 13) ^ (3/2) - (14 - 5) ^ (3/2)). This evaluates to: - 80 - (20/3) + 180. So, CS = $93.33.
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