Two points on a linear market demand curve are given as; (P,Q)=(18,12) and (8,32). On a linear market supply curve if P= 4 the quantity supplied is 0. While if P-12 the quantity supplied is 24.
(a) construct the Demand equation.
(b) What is the equation of supply curve?
(c)Derive the equation the equilibrium price and quatity for the market if it is a perfectly competitive one.
(d) What will the price and quantity be if the supplier is a monopolist?
(e) Compute the consumer surplus in the competitive case
(f)What is the consumers surplus in the monopoly case?
(g)Calculate the producers surplus in the competition case.
(h)What is the producer surplus in under monopoly?
(i) Suppose the government imposes a Ksh. 10 per unit tax .recalculate the equilibrium prices and quantities in the competitive and monopoly situations.
(j)What are the magnitudes of consumer surplus in the competitive and monopoly case taking the tax into consideration
(k)Calculate the price elasticity of demand at the competitive result.
(1) What is the price elasticity of demand at the monopolist equilibrium case?