Assume the market for new homes is competitive in a certain area. Demand for these homes (simple, starter homes) is given by P = 200,000 - 15Qd, supply for homes is P = 100,000 + 10Qs
A) What is the equilibrium price and quantity?
B) What is Producer, Consumer, and overall surplus?
Now assume the market is controlled by a monopolist.
C) What is the new Equilibrium Price and quantity?
D) What is Producer Surplus, Consumer surplus, and deadweight loss.
E) Now assume the market is comprised of two identical firms. Find the Equilibrium price, quantity, and consumer and producer surplus. (you will have to derive a reaction function)