Suppose the market demand function (expressed in dollars) for a normal product is P = 80-1

Economics Dec 05, 2020

Suppose the market demand function (expressed in dollars) for a normal product is P = 80-1.0Q, and the marginal cost (in dollars) of producing it is MC=1Q,

where P is the price of the product and Q is the quantity demanded and/or supplied.

a. How much would be supplied by a competitive market?

b. Compute the consumer surplus, producer surplus and economic surplus.

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