Joe, Michael and Harry are the only consumers of "Monkey Pants" which is produced by "Black...

Joe, Michael and Harry are the only consumers of "Monkey Pants" which is produced by "Black Pants Factory" and "White Pants Factory". The inverse demand functions of Joe, Michael and Harry are given as P = 10 - 2Q, P = 15 - Q/2 and P = 5 - Q, respectively. The supply function for "Black Pants Factory" is Q^B = -4 + 2P and supply function for "White Pants Factory" is Q^W = -5 + P

a) Find the aggregate demand function and draw it on a graph.

b) Find the aggregate supply function and draw it on a graph.

c) Find the market equilibrium price and quantity when only "White Pants Factory" can sell "Monkey Pants" in the market.

d) Find the market equilibrium price and quantity when only "Black Pants Factory" can sell "Monkey Pants" in the market. Also find the amount of "Monkey Pants" that will be bought by Joe, Michael and Harry.

Expert Solution

Rahul Sunny answered 2 years ago

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