9. Define elasticity of demand. Suppose, the demand function is Qd = 180 – 2P and supply function is Qs = 5+0.5P. Calculate the price elasticity of demand and supply. Calculate also consumer’s surplus and producer’s surplus.

14. Refer to question no. 9. If the government arbitrarily set the price $80, calculate fictional gain or loss of the industry. Calculate also the deadweight loss, consumer’s surplus and producer’s surplus.

15. Refer to question no. 9. If the government arbitrarily set the price $60, calculate fictional gain or loss of the industry. Calculate also the deadweight loss, consumer’s surplus and producer’s surplus. Note: If

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Question 15 If the government arbitrarily sets the price at 60 we can calculate the fictional gain or loss of the industry as well as the deadweight l... View the full answer