1) Equilibrium Price and Quantity

To find the equilibrium price and quantity, we need to set the quantity demanded (QD) equal to the quantity supplied (QS).

QD = QS 20 – 2P = 2P 20 = 4P P = 5

Therefore, the equilibrium price is P = 5 and the equilibrium quantity is Q = 20 – 2(5) = 10.

2) Graph of the Market

To graph the market, we can plot the quantity demanded (QD) and quantity supplied (QS) curves.

QD = 20 – 2P QS = 2P

We can substitute P = 5 into these equations to find the equilibrium points.

QD = 20 – 2(5) = 10 QS = 2(5) = 10

Therefore, the equilibrium point is (5, 10).

3) Consumer Surplus

Consumer surplus is the difference between the maximum price that a consumer is willing to pay for a good and the actual price that they pay.

In this case, the maximum price that a consumer is willing to pay for a unit of the good is $20. However, the actual price that they pay is $5. Therefore, the consumer surplus is $20 – $5 = $15.

Bonus: Joker

What do you call a fish wearing a suit?

Sofishticated.