Answer:
Step-by-step explanation:
I'll use y for quantity and x for price [love my x and y] and rewrite the demand and supply functions:
Demand: y=1204−11x
Supply: y = -3 + 6x
==
We want to know the equilibrium price and quantity. The quantities purchased and sold would be equal to the quantities supplied:
1204−11x = -3 + 6x
-17x = - 1207
x = 71 The price of a widget is 71 units ($, €,£,¥, etc.) at equilibrium
A price of 71 would lead to a demand and supply of:
y = 1204−11x
y = 1204−11(71)
y = 423 Widgets
We can also plot this to find the point (71,423). See the attachment.
At this point, I'm uncertain how to answer the "producer surplus" and "unmet demand" at equilibrium. This is what I did, so please judge if it is correct.
The demand line, y=1204−11x, tells us that if the price were 0, the demand would be 1204, which I'll assume in the maximum, since it is stipulated that x > 0 (I imagine it may no longer be a straight line when the price goes into negative territory. I'd be the first in line to accept a widget and $5 if they were priced at -$5).
At equilibrium, therefore, we would still have an unmet demand of (1204 - 423) or 781 widgets that customers wanted, but wouldn't pay the price.
It seems to me that this would also be the unmet demand: Product that could have been sold, but wasn't, due to the price. I'm unsure, however.
