You'll get the same if you plug it in either one by the way and you should check that. Or you could just plug that into a calculator and substitute the correct value of X. That's going to be one 234 five, which is 20 An 80 plus, 20 is 100. So I'm going to take two million and move the decimal five places to the left. Okay, so the price is going to be 80 plus when you multiply by this decimal, It's equivalent to moving the decimal. I'm actually going to plug it into this one because it's easier to do mentally. The surplus obtained by consumers is represented by the area below the demand curve and above the horizontal line at the level of the market price. It honestly doesn't matter which one you do. So X is going to be two million now to figure out the price at which this occurs, I plug it into either one of these equations. Here is the formula for consumer surplus: In Practice Here is an example to illustrate the point. Um And I get a very large number, I get two million. There is an economic formula that is used to calculate the consumer surplus by taking the difference between the highest consumers would pay and the actual price they pay. So now I'm gonna plug that into my calculator because I don't feel like thinking today. I'm going to add This to both sides that I get. Example 7.8.4: Gini Index with a Formula for Income Distribution. In practice this number is often multiply by 100, reporting the percentage (0 to 100) rather than proportion (0 to 1) of the area under the ideal function and above the measured function. So I'm going to subtract 80 from both sides so that this side becomes 60. Computationally, G 1 0(x L(x))dx 1 0xdx 21 0(x L(x))dx. We're just going to set the equation is equal to each other to find the point of intersection. So there's no point in even trying to draw it. Okay, But they aren't horizontal and eventually at some very, very large number they're going to intercept. It's also going to look like a horizontal line. It's just that if the y intercept of this one is 140 the rate of change is that that is so close to zero that this is almost going to look like a horizontal line, Which means this is going to start at 80, Wherever 80 is and it's going to increase at such a small rate. And the reason isn't because it's challenging, right, this still has a slope on a Y intercept. And the reason I say find the point of intersection instead of just graphing them is because these are actually really difficult to graph. But to do that, the first thing we're gonna have to do is find the point of intersection. Okay, So we are given demand and supply curves and we essentially want to find the consumer and producer surplus.
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