Use the following market supply and demand functions to answer questions PD = 5000 − 25QD...

Use the following market supply and demand functions to answer questions

PD = 5000 − 25QD

PS = 15QS

Solve for the equilibrium price and quantity.

What is the consumer surplus and producer surplus generated by this market?

If there were an added fixed cost of production equal to 1000, what is the new equilibrium price and quantity? 1

How do the producer and consumer surpluses change, respectively, as a consequence of the additional fixed cost given in question 11? (Calculate the numerical value of the change)

Expert Solution

Rahul Sunny answered 1 year ago

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