Question: The demand for a good is P = 2000 - 0.3Q. The supply is P = 500 + 0.2Q. 1) What is the equilibrium price

The demand for a good is P = 2000 - 0.3Q. The supply is P = 500 + 0.2Q.

1) What is the equilibrium price and quantity?

2) What is producer surplus?

3) What is the consumer surplus?

4) What is the total wealth in the market?

5) What is the new equilibrium if demand moves downward with the new demand function of P = 1400 - 0.3Q. Compare with part 1.

6) What is the new equilibrium if supply moves upward with the new supply function of P = 800 + 0.2Q (consider the original demand function). Compare with part 1.

7)Bonus question(0 points): Assumes both shifts in the supply and demand (part 5 and 6), what is the new equilibrium? Compare it with the initial equilibrium.

Please make sure you show all your work.

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