Question-1 Suppose the demand and supply functions are given as the following: = 140 = + 20 a) Determine the equilibrium price and quantity algebraically and show the equilibrium graphically (10 Points).

b) Determine the consumer and producer surplus (10 Points).

c) Fill out the following table and show the equilibrium on the table (10 Points).

Price Quantity /Demanded Quantity /Supplied

30

40

50

60

70

80

d) For which price ranges, we observe excess supply (surplus)? and excess demand (5 Points)?

e) Suppose demand shifts from = 140 to = 160 , while supply stays the same = + 20 Find the new equilibrium price and quantity. Show it on the same graph as in part (a) What could be the reasons for this shift? Name three reasons (10 Points).