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Unformatted text preview: in the town. 5. Name the three conditions necessary for the main welfare theorem to hold. 2 Review: Math Example 1. Suppose the inverse demand function is given by Q = 200 - 2P and the supply function is given by P = 50 + Q. Find the market equilibrium price and quantity. For all sections except for Friday 1-2, we changed the problem to be P=200-2Q for inverse demand and supply as Q=50+P. The solutions reect the latter problem. As is, the rst function is actually a demand function (since quantity is a function of price). My apologies. 2. Calculate the consumer surplus and producer surplus. 3. Calculate the deadweight loss. 4. Now suppose the market is operated by a monopolist. Find the new equilibrium price and quantity under a monopolist. 1...
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- Spring '09
- Consumer Surplus