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Find the original equilibrium

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Reference no: EM132479894

1. Suppose demand takes the form P = 10 - 2Q and supply takes the form P = 2 + 2Q.

a. Find the market equilibrium (2)

b. How much total revenue (i.e. P*Q) will the firm receive at this equilibrium?

2. Suppose the government decides to impose a price floor on dairy products to prevent dairy farms from closing down. If the market for a case of milk takes the form of:

Demand: P = 100 - 10Q

Supply: P = 10Q

a. Find the original equilibrium

b. Find the market equilibrium with a price floor of $60 per case.

c. Illustrate this price floor on a graph

Reference no: EM132479894

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