Determining equilibrium price and output

Reference no: EM1367006

Question: Consider a competitive market served by many domestic and foreign firms. The domestic demand for these firm's product is Qd=500-1.5P. The supply function of the domestic firms is Qsd=50+.5P, while that of the foreign firms is Qsf=250.

A) Determine the equilibrium price and quantity under free trade.

B) Determine the equilibrium price and quantity when foreign firms are constrained by a 100-unit quota.

C) Are domestic consumers better or worse off as a result of free trade?

D) Are domestic producers better or worse off as a result of the quota?

Reference no: EM1367006

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