Calculate the quantity and price-axes intercept points

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a. Find the equilibrium price and quantity.

In equilibrium

Qd = Qs

298 -8 = -32 +4P

12P = 330

P = 330/12 = 27.5

In quantity

Q = 298 - (8 x 27.5) = 298 - 220 = 78

b. Sketch this market. [HINT: Be sure to draw the two curves carefully, using inverse demand and supply functions to calculate the quantity- and price-axes intercept points.]

c. Use the demand function to calculate consumer surplus.

d. Use the supply function to calculate producer surplus.

e. What is the total welfare to society?

Chose one event from problem 5 above that would affect demand and one event that would affect supply. Explain what would happen to equilibrium price and quantity if both events occur simultaneously.

Reference no: EM132167930

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