HHello me in my assignment. 9) MARKET EQUILIBRIUM Suppose the demand for a product is given by p = d(q) = -0.4q + 300 and

HHello me in my assignment. 9) MARKET EQUILIBRIUM
Suppose the demand for a product is given by p = d(q) = -0.4q + 300 and the supply for the
same product is given by p = s(q) = 0.2q. For both functions, q is the quantity and p is the price, in
dollars.
a. Find the equilibrium point. (i.e. the market demand quantity and the market price)
b. Find the consumer surplus at the equilibrium price.
c. Find the producer surplus at the equilibrium price. 5. Suppose the firm’s production function is (1 = SOVLK. a. In the short run, the firm’s capital is fixed at 10 units. is the equation of the firm’s short run demand for labor? How much labor would the firm hire to produce 500 units of output? How much labor would the firm
hire to produce 1,000 units of output? How much labor would the firm hire to produce 1,500 units of output? b. Derive the firm’s long run input demand functions for (i) labor and (ii) capital, in terms of output and input prices. To fund the demand equations, solve the firm’s cost minimizing problem generalizing the price of labor
as w and the price of capital as r. (b) The demand function of the company that make refrigerator is given by
P = D(Q) = 36 – 4Q
where P is the unit price in ringgit and Q is the quantity demanded in units of a
thousand. The supply function for these refrigerator is given by
P = S(Q) = 6+Q
where P stands for the unit price in ringgit Q stands for the number of refrigerator
that the supplier will put on the market, in units of a thousand.
Determine the consumers’ surplus and the producers’ surplus if the market price of
a refrigerator is set at the equilibrium price.
[8 marks] Question 3 [Marks: 25! (1.3.1 The monetary transmission mechanism can be depicted in the form of a graph [1D]
or using symbols. Explain, with the aid of symbols, the monetary transmission mechanism when
interest rates increase
[Note: Prices and wages are variable} (1.3.2 Explain, using the All—AS model, how the South African Government can use [15]
fiscal policy as a tool to recover from the negative effects of this CUVID—lfi pandemic. lI"our answer must include the following: i The description of the type of fiscal policy required; {4} C An explanation of how the implementation of this tool will work their way
through the economy to achieve the desired effect; {5} i The AD—AS graph showing the implications of your recommendations. [5] Marks will be awarded for your ability to integrate theory with the scenario provided. l. The following table shows a film’s input, output and oosts in the short run. The price of each unit of output is
H.200. (All costs and prices are in Tk.) Labor Quantity of Variable Total
input Ouggut cost cost
0 O 0 500 l 4 20 520 2 S 40 540 3 13 60 560 4 19 80 580 5 26 100 600 a) is the AF C of the firm when it employs l worker? b) is the MC of the 2nd worker? c) is the profit when the firm employs 3 workers? (1) is the MP of the 4′” worker? 6) Does this firm follow the law of diminishing marginal productfreturns, explain. 2. State the characteristics with an example of all the market structures discussed in class.