Assume the quantity demanded (QDX) and quantity supplied (QSX) of product “X” are presented as QDX = 340 - 5PX and QSX = 4PX - 20, where PX is product price, in dollars.

a)  Using algebra, calculate the equilibrium price (P*) and the equilibrium quantity (Q*).

b) Calculate the dollar amount of consumer surplus ($CS) in the market and calculate the dollar amount of producer surplus ($PS) in the market.

c)  Assume the government imposes a $50 price floor in the market for product “X”. Calculate the dollar amount of the resulting consumer surplus that is “lost” in the market after the imposition of the price floor.

d) Describe the effect of the price floor upon the attainment of equilibrium in the market for product “X”.

2. The research department of an electronics manufacturing firm estimates the supply function of television sets is portrayed as QSX = 260 + 4 PX - 4 PY - 1 PZ, where QSX is the quantity supplied of televisions per week, PX is product price, PY is the price of a computer monitor, and PZ is the price of an input used in the production of monitors.

a) Calculate the inverse supply curve for televisions where: PY = $120 and PZ = $180.

b) At the price of (PX=) $400, calculate the dollar amount of producer surplus ($PS).