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Questions: Assume the following demand and supply functions Qd= -20p+160 Qs= 40p - 20
i) Draw these functions in one graph. Label your lines and axes correctly. Add the intercepts of both lines (NB: Two points on the graph are enough. You do not need to respect the scale)
ii) Determine the equilibrium price and quantity.Then label the equilibrium on your graph.
iii) Suppose that supply shifts to Qs= 40p - 80 with no change in demand. Determine the new equilibrium price and quantity.
iv) At the new equilibrium calculate the consumer's and producer's surplus.
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