Suppose that you are the vice president of operations of a manufacturing firm that sells an industrial lubricant in a competitive market. further suppose that your economist gives you the following supply and demand functions: demand: upper q superscript upper d = 45 minus 2 upper p supply: upper q superscript upper s = negative 15 plus upper p. what is the consumer surplus in this market? consumer surplus is $ 20.25. (enter your response rounded to two decimal places.)

400

Explanation:

Qd = 45 - 2P

Qd    = -15 + P

45 - 2P = P - 15

60 = 3P

60/3 = P = 20

Q = 45 - 2*20 = 5

Q = -15+20 = 5

The quantity will be 5 and price 20

Now we will caclulate the consumer surplus:

Which the area of the demand curve above the equilibrium.

We calculate he area of a triangle:

base x high / 2

consumer surplus = 400

The correct answer is complex and it is simplify in the explanation below.

Explanation:

To begin with, in the microeconomics theory the terms of cross price elasticity of demand and the own price elasticity of demand are refered as indicators that can help the company's manager to have a major perspective according to the situation in where they're in and therefore those economic indicators turn out to be strategic tools to use. And that is because they can measure the sensibility of the demand according to the price of the product. In the case of the cross-price elasticity, the demand will change depending on a variation of the price of a good of the competition, so that will explain that if for example the competition lower their prices then the demand of our product will probably go down because of that. So once said that, its importance relies in the fact that in the food industry the companies need to understand who are they competing with and that could be possible having in mind these terms.