1 a.Ifthe demand curve ofamarket is P = 40-4 Q and the supply curve is P = 5+3Q.

Question

1 a.Ifthe demand curve ofamarket is P = 40-4 Q and the supply curve is P = 5+3Q. What is equilbaium price and quantiry? ) What is the surplus if a price support of $32 is imposed in the market? b. A competitive industry (Perfect Competition) consists of 50 firms. The short run marginal cost curve for each fim (same sized) is given by MC 100+0.3Q. The demand curve faced by the industry is given as P = 200-0202. What is the pnce charged by each firm and what quantity will each firm produce? c. Calculate the profit earned by the profit maximizing monopoly which has the following cost and revenue 100 75 S0 MR

Explanation / Answer

a) i) euqilbruim price and quantity is where, demand is equal to supply

40-4Q = 5+3Q

35 = 7Q or Q = 5

P = 40-4Q = 40-20 = 20

so, equilbruim price is $20 and quantity is 5

ii) when the price is $32.

quantity demanded , P = 40-4Q

32 = 40 -4Q or Q = 2

quantity supplied , P = 5+3Q

32 = 5 + 3Q or Q = 9

surplus = quantity supplied - quantity demanded = 9-2 = 7

so. surplus = 9 .

B) please upload. as it different question. its against chegg policy

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