Consider a market for rides (as in the market that Uber operates). Demand for rides is given by QD=120-2P. Supply of rides by drivers is given by Qs=10P. The equilibrium price in this market is The consumer surplus is The producer surplus is goes to drivers and some to Uber. The total surplus is ✓. Note that producer surplus is calculated in the standard way. Some of it Suppose now that Uber sets the price of a ride at $12. The quantity of rides in the market is now The consumer surplus is now The producer surplus is now Assuming Uber's revenue is 20% of ride revenue, their revenue at the equilibrium price is price of $12 is V V. (still calculated in the standard way). ✓and at a

Consider a market for rides (as in the market that Uber operates). Demand for rides is given by QD=120-2P. Supply of rides by drivers is given by Qs=10P. The equilibrium price in this market is The consumer surplus is The producer surplus is goes to drivers and some to Uber. The total surplus is ✓. Note that producer surplus is calculated in the standard way. Some of it Suppose now that Uber sets the price of a ride at $12. The quantity of rides in the market is now The consumer surplus is now The producer surplus is now Assuming Uber's revenue is 20% of ride revenue, their revenue at the equilibrium price is price of $12 is V V. (still calculated in the standard way). ✓and at a

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter4: Markets In Action

Section: Chapter Questions

Problem 1SQP

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