Question: Question 2 : The demand curve is QD = 2 5 0 0 2 0 P and the supply curve is QS = 1 0

Question 2: The demand curve is QD =250020P and the supply curve is QS=100P 3500.
a. Calculate the equilibrium price and quantity in this market.
b. Calculate consumer surplus and producer surplus in this market.
c. Suppose the government limits the sales of this product to 500. What will be the price
in the market after the quota is imposed?
d. Calculate consumer and producer surplus after the quota. Explain what happens to
consumer and producer surplus after the quota.
At the current market wage level.

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