Question
Given a demand fxn of 20-2P and a supply fxn of -4+P for a perf. competitive market:
1. Calculate the equilibrium price and qty. (I got e. price = 4 and e. qty = 8 is that right?)
2. Calculate producer surplus, consumer surplus. (i got 8 and 4)
3. if the market becomes a monopoly that charges $ 15, what is:
a. the loss in consumer surplus
b. additional profit of the monopolist
c. deadweight loss this part
i don't understand do i compute for a new equilibrium price (7) and qty (3)?
1. Calculate the equilibrium price and qty. (I got e. price = 4 and e. qty = 8 is that right?)
2. Calculate producer surplus, consumer surplus. (i got 8 and 4)
3. if the market becomes a monopoly that charges $ 15, what is:
a. the loss in consumer surplus
b. additional profit of the monopolist
c. deadweight loss this part
i don't understand do i compute for a new equilibrium price (7) and qty (3)?