4) The following equations represent the market for air travel between the United States and Europe....

4) The following equations represent the market for air travel between the United States and Europe. Use the equations to answer the following questions. ?? = 160,000 − 200? ?? = 500? − 1000

a) Find the price intercept for both the supply and demand curves.

b) Find the equilibrium price and quantity for air travel between the United States and Europe.

c) Show the price intercepts and equilibrium graphically.

d) Calculate consumer surplus and shade in the area on the graph above. e) Calculate producer surplus and shade in the area on the graph above.

Expert Solution

Rahul Sunny answered 9 months ago

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