Firms in a competitive industry produce 120,000 units ofAlewawhen the market price was $80. Today, at $120 per unit, 200,000 units are produced and supplied, daily. Consumers on the other hand buy 120,000 when the market price is $100 per unit, but would buy only 110,000 units when the price $140 per unit.What is theequilibriummarket price?

(i) What is the equilibrium market quantity?

(ii) To encourage production, the government decides to add $10 to the equilibrium market price. Discuss the effect of this on

a) the quantity demanded and supplied.

b) profits/costs for existing firms.

c) market outcomes, in the long run, LR.