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ECON4002 Coursework Problem Set page 3 Section A (atA Question A1 (25 marks) Swiss Export Cheese Market: Switzerland is famous for its good quality cheese of various kinds. Until recently, the government was tightly regulating both its domestic and export cheese markets, with the position that the future of Gruyere and Emmental is best secured by embracing international competition. This movement ended years of import barriers that doubled the cost of some EU cheese on Swiss shelves, as well as export subsidies that dumped half-priced Emmental in places like Italy. To gain further insights into this recent event, consider the following hypothetical example of the export Emmental cheese market. Suppose that the annual demand for and supply of export Emmental cheese are given by the following functions: D: P = - Q + 80 400 1 S: P = Q + 40 1,200 (A1a) Mathematically derive the market equilibrium price (P*) and quantity (Q*). Make sure to show the process of derivation. 3 marks