Question 2. The market supply and demand curves for a product are:
QS=0.5P (supply curve)
QD=60–2P (demand curve)
where Q is the quantity of the product and P is the market price.
(1). Calculate the equilibrium price, equilibrium quantity and total social welfare. (10 points)
(2). Suppose that the market has changed from a perfectly competitive market to a monopoly market, calculate the new price–output combination and the total deadweight loss in the monopoly market. (10 points)
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