# Consumers' and Producers' Surplus Calculation for Dollhouses

## a) What is the consumers' surplus for the dollhouses?

Given a popular three-story dollhouse with a price-demand equation of p= D(z) = 201 – 0.8x and a price-supply equation of p = S(x) = 0.22 + 132, how can we calculate the consumers' surplus for the dollhouses?

## b) What is the producers' surplus for the dollhouses?

How can we find the producers' surplus for the dollhouses based on the given price-demand and price-supply equations?

## Consumers' Surplus Calculation:

To calculate the consumers' surplus for the dollhouses, we need to find the area between the demand curve and the price line using the given equations and integrating.

## Producers' Surplus Calculation:

The producers' surplus for the dollhouses can be determined by calculating the area between the supply curve and the price line utilizing the provided equations and integration.

In order to calculate the consumers' and producers' surplus for the dollhouses, we need to understand the concept of surplus in economics. Consumers' surplus refers to the economic benefit that consumers receive when they are able to purchase a product at a price lower than what they are willing to pay. On the other hand, producers' surplus is the benefit that producers obtain when they are able to sell a product at a price higher than their production cost.

Consumers' Surplus Calculation:

For the consumers' surplus calculation, we first use the demand equation: p = D(z) = 201 – 0.8x. By rearranging the equation, we can find the quantity demanded in terms of price. Next, we calculate the area between the demand curve and the price line by integrating the demand equation within the range of quantities demanded. This will give us the consumers' surplus, which represents the excess benefit that consumers gain from purchasing the dollhouses at a certain price.

Producers' Surplus Calculation:

For the producers' surplus calculation, we utilize the supply equation: p = S(x) = 0.22 + 132. By rearranging the equation, we determine the quantity supplied in relation to price. Then, we compute the area between the supply curve and the price line by integrating the supply equation over the range of quantities supplied. The result will be the producers' surplus, indicating the extra profit that producers earn from selling the dollhouses at a specific price.

Understanding consumers' and producers' surplus is essential in analyzing market efficiency and evaluating the welfare of consumers and producers in the dollhouse market. By calculating these surpluses, we can assess the economic impact of pricing decisions and market equilibrium on all parties involved.