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Industry Hypothesis.
1. Define the supply and demand curves for the industry (show the equations) and the price-elasticity of demand (you can represent an imaginary situation). For example, the demand curve for the industry is QD=500-1 OP and the supply curve is QS=200+1OP. Graph the curves (numerical, graphical and verbal answers).
2. Show the equilibrium price and quantity (numerical, graphical and verbal answers).
3. Show the consumer and producer surplus in a graph and calculate their value (numerical, graphical and verbal answers).
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