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  3. demand for propane is given by d(x) = 6.5 ? 0.25x,

Demand for propane is given by D(x) = 6.5 ? 0.25x, and supply is given by...

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Advance Math

Demand for propane is given by D(x) = 6.5 ? 0.25x, and supply isgiven by S(x) = 2.1 + 0.15x, where x is in gallons per monthcustomer and D(x) and S(x) are dollars per gallon. Find thefollowings:  

(a) Equilibrium point (Xe,Pe)  

(b) Find the consumer surplus and the producer surplus at theequilibrium point.

(c) Assume a price ceiling of $3 per gallon of propane isimposed. Find the point (Xc,Pc)  

(d) Find the new producer surplus and the new consumer surplusat (Xc, Pc).

(e) Find the deadweight loss.

Answer & Explanation Solved by verified expert
3.5 Ratings (516 Votes)
Let us plot the given Demand and Supply equationsPlotting these on a graph we haveThus the equilibrium point isb Now we draw a horizontal line passing through theequilibrium point and thenThe area of red triangle is the consumersurplus and the area of the blue    See Answer
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