a)

You are given that the supply curve for the market is:- =240224200

What does this supply curve model predict for the maximum possible price in this market? Find the quantity, , for this maximum possible price. You should show your working.

Plot the curve and describe the significance of the supply curve for >.

Note:

There are several software packages available online that will allow to plot the curve such as geogebra, or Desmos. They can also be used to check your maximum point.

b)

You are given that the demand curve for the market is a straight line. The price decreases by 10 for every extra unit in quantity. The market is currently in equilibrium with =30 units.

Explain what is meant by an equilibrium point and find the other equilibrium point.