Question: ( 15 points ) Suppose the demand and supply equations for a good X are QD,X=600-10PX QS,X=10PX-300 Find the equilibrium price ( PX* ) and

  1. (15 points) Suppose the demand and supply equations for a good X are

QD,X=600-10PX

QS,X=10PX-300

  1. Find the equilibrium price (PX*) and the equilibrium quantity (QX*). Also, show this outcome on a graph. Label the equilibrium outcome "W". (PX on the vertical axis and QX on the horizontal axis). Do not forget to include the value of the intercepts on the vertical and horizontal axes. Show ALL your work.
  2. Now assume that a 50-unit quota is implemented on good X. Derive the supply equation that corresponds to this new scenario. complete answer
  3. Find the new market price assuming the amount of good X supplied in the market is 50 units. Show ALL your work.
  4. Show on the graph you drew in part a) the new market equilibrium outcome. Label this point "Z".
  5. Calculate and show in a graph the areas representing the consumer surplus, producer surplus, and deadweight loss corresponding to the scenario described in part b). Show ALL your work.

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