Let demand (Qa) and supply (Qs) of oil be equal to the following linear functions: Qd...

 

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Let demand (Qa) and supply (Qs) of oil be equal to the following linear functions: Qd = 99-7.7 Poil + 2.8 P gas + 8 M Qs = 3 + 7.5 Poil - 0.8 PK-6.7 PL - 7.5 PN Where Poil is the price of oil, Pgas is the price of gas (set = 59). PK is the price of capital (set = 65), PL is the price of labour (set = 62), PN is the price of natural resource (set = 34), and M is a measure of weekly income (set = 519). Assuming that the market for oil is perfectly competitive, what is the total surplus at the current market equilibrium? Let demand (Qa) and supply (Qs) of oil be equal to the following linear functions: Qd = 99-7.7 Poil + 2.8 P gas + 8 M Qs = 3 + 7.5 Poil - 0.8 PK-6.7 PL - 7.5 PN Where Poil is the price of oil, Pgas is the price of gas (set = 59). PK is the price of capital (set = 65), PL is the price of labour (set = 62), PN is the price of natural resource (set = 34), and M is a measure of weekly income (set = 519). Assuming that the market for oil is perfectly competitive, what is the total surplus at the current market equilibrium?

Answer rating: 100% (QA)

Total surplus QaPoil QsPoil 99 77Poil 2859 8519Poil 3 75Poil 0865 6762 7534Poil 99Poil 77Poil2 166... View the full answer