Question
The demand function for Internet cameras is given by PX=60-X. The marginal cost curve is...
- The demand function for Internet cameras is given by PX=60-X. The marginal cost curve is MC = 10. Assume that there is a competitive equilibrium in the market currently.
- Find the equilibrium price and quantity in the market.
- Calculate consumers’ surplus.
- Calculate the producers’ surplus (profit).
- Draw the supply and demand curve (on the same plane). On it, mark the equilibrium price and quantity, consumers’ surplus (mark the area) and producers’ surplus (mark the area).
- Is the outcome Pareto Efficient? Explain.
- Does the outcome maximize utility in the Bentham’s sense?
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