Question: WEEK2: Problem Solving in economics: Equilibrium and welfare analysis Suppose the supply curve for soap is as follows: Supply: QS= 1550 + 240P The price

WEEK2: Problem Solving in economics: Equilibrium and welfare analysisSuppose the supply curve forsoapis as follows:

Supply: QS= 1550 + 240P

The price of soap is measured in dollars while quantity is measured per piece. The demand is given by the following

Demand: QD= 3550 - 260P

  1. Can we find themarket-clearing/equilibrium price?
  2. What is the quantity sold at the equilibrium price?
  3. Find out the consumer surplus at the equilibrium price.
  4. Find out the producer surplus at the equilibrium price.
  5. Find out the total welfare generated by the market.
  6. Does the equilibrium price maximise the total welfare? Is there any deadweight loss at the equilibrium price?

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