A person's demand and supply equations for rice per month are as following:

Demand: Q =  40 - 5*P

Supply  : Q = -20 + 10*P

Required:

What are the market equilibrium price ($/kg) and quantity (kgs/month) for rice?

At the market equilibrium price, what are the consumer surplus and producer surplus?

If the rice price rises to $5/kg, 

What are the consumer surplus and producer surplus?  

What is the impact of this rice price increase on the consumers and producers as a whole?

Answer rating: 100% (QA)

To find the market equilibrium price and quantity for rice we need to set the demand equal to the su... View the full answer