Question: andnbspthe annual demand for water flavoured with barley and hops...
The annual demand for water flavoured with barley and hops in Newcastle (Australia) is estimated to be P = 20 − 0.001QD and the supply is estimated to be P = 4 + 0.000333QS.
(a) Find the equilibrium price and quantity of this flavoured water.
(b) Calculate the consumer and producer surplus at the equilibrium price.
(c) What is the total surplus created in the market for flavoured water?