4. You are the manager of a firm selling a cybersecurity service. The market is in...

4. You are the manager of a firm selling a cybersecurity service. The market is in equilibrium; the market price is $1,000 and the market quantity is 100,000. Your firm’s cost is $500 to provide the service.

Draw the market in equilibrium and clearly label your firm along the supply curve. What is your producer surplus? Then for two scenarios, answer the following, logically proving your position.
What happens to your firm’s PS when demand shifts up? Graphically and logically support your position.
What happens to your firm’s PS when supply shifts up? Graphically and logically support your position.
How would you consumers feel in the situations described in (ii.) and (iii.)? Why?

Expert Solution

Rahul Sunny answered 2 years ago

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