[40 marks]Consider a vitamin supplement that is supplied by many different firms. The demand curve is 𝐷 =16 − 3𝑝 and the supply curve is 𝑆 = −4 + 2𝑝.(a) [5 marks]Find the competitive equilibrium.(b) [10 marks]Compute the consumer surplus and producer surplus.(c) [5 marks]Scientists discover that a vegetable is rich in this vitamin and the vegetable is not expensive at all.As a result, the demand curve shifts to 𝐷 = 14 − 4𝑝. The supply curve remains the same. Find the competitiveequilibrium after the scientific discovery.(d) [10 marks]Compute the consumer surplus and producer surplus after the scientific discovery.(e) [10 marks]After making the calculation that you just made, Consultant Bob finds that the social surplus de-creases after the scientific discovery. Therefore, he concludes that the discovery creates a deadweight loss andis detrimental to the society. Evaluate this argument. (Limited to 200

Consider a vitamin supplement that is supplied by many different firms. The demand curve is D =16 − 3p and the supply curve is S = −4 + 2p. (a) Find the competitive equilibrium. (b) Compute the consumer surplus and producer surplus. (c) Scientists discover that a vegetable is rich in this vitamin and the vegetable is not expensive at all. As a result, the demand curve shifts to D = 14−4p. The supply curve remains the same. Find the competitive equilibrium after the scientific discovery. (d)Compute the consumer surplus and producer surplus after the scientific discovery. (e) After making the calculation that you just made, Consultant Bob finds that the social surplus decreases after the scientific discovery. Therefore, he concludes that the discovery creates a deadweight loss and is detrimental to the society. Evaluate this argument. (Limited to 200 words.)

The demand curve is 𝐷 =16 − 3𝑝 and the supply curve is 𝑆 = −4 + 2𝑝.(a) [5 marks]Find the competitive equilibrium.(b) [10 marks]Compute the consumer surplus and producer surplus.

Consider a market with demand curve 𝐷 = 25 − 3𝑝 and supply curve 𝑆 = −4 + 4𝑝. The unit of price is dollar. (a) Find the competitive equilibrium. (b) Compute consumer surplus and producer surplus at the equilibrium. (c) The government decides to impose a tax of $2 per unit. Compute the competitive equilibrium with the tax. (d) Compute consumer surplus, producer surplus and tax revenue at the new equilibrium.

Question 1 Suppose there are two firms in the market of good X. The cost functionof firm 1 is C1(q) = q2, whereas the cost function of firm 2 is C2(q) = 3q2. Suppose thefirms operate in a perfectly competitive market and face a perfectly elastic demand atP = 30. Find the equilibrium quantity produced in this market. (Hint: Obtain eachfirm’s inverse supply curve and then add them horizontally.)

Assume that the market is currently supplied by ten identical sellers each with variable cost VC(𝑞) = 3𝑞 + 1/4𝑞^2, and the market demand is 𝐷 = 10(7 − 𝑝). Assume that the market demand is sufficiently high that no seller shuts down.(a) [5 marks ]Find each seller’s marginal cost curve.(b) [10 marks ]Assume that there are sufficiently many sellers so that the market can be treated as perfectly competitive. Find the competitive equilibrium.