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Economics homework help? - braves29forlife - 01-16-2013 04:22 PM
1) Suppose the demand curve for widgets is P = 30 – 3Q and the supply curve is P = 10 + 2Q.
a.) Find the equilibrium price and quantity in the free market.
b.) Calculate aggregate social welfare (consumer surplus + producer surplus) in the free market.
c.) Find the equilibrium price and quantity in a monopolized market.
d.) Calculate aggregate social welfare (CS+PS) in the monopolized market.
Any help would be awesome thanks.
- Selecta - 01-16-2013 04:30 PM
im a junior so idk
- Anjaree - 01-16-2013 04:30 PM
a. 30-3Q=10+2Q
5Q=20
Q=4, P=30-12=18
b. consumer surplus= 1/2(30-18)x4=24
producer surplus= 1/2(18-10) x 4=16
welfare=24+16=40
c.MC=MR 30-6Q=10+2Q
8Q=20,Q=2.5,P=30-7.5=22.5
d. cs=1/2(30-22.5)x2.5=9.375
ps=1/2(22.5-10)x2.5=15.625
welfare= 25