The market demand function for potatoes in Land 1 is Q50 0.5p, and in Land 2...

 

Transcribed Image Text:

The market demand function for potatoes in Land 1 is Q50 0.5p, and in Land 2 is Q2=120-p2. The market supply functions in Land 1 and Land 2 are Q = -10 + P, and Q-20+ p, recpectively. (a) Calculate the change in the surplus of producers and consumers in each of the regions through the establishment of a common potato market in the absence of transport costs. (b) What if the cost of transportation of potato from one region to another is $10 per unit? The market demand function for potatoes in Land 1 is Q50 0.5p, and in Land 2 is Q2=120-p2. The market supply functions in Land 1 and Land 2 are Q = -10 + P, and Q-20+ p, recpectively. (a) Calculate the change in the surplus of producers and consumers in each of the regions through the establishment of a common potato market in the absence of transport costs. (b) What if the cost of transportation of potato from one region to another is $10 per unit?