Problem
A firm invents and obtains a patent for a new strong, biodegradable fabric that is used to makegrocery bags. The demand function for these bags is Q = 800 - p. The firm's cost function isC(Q) = 100 + 100Q + 0.5Q2.
a. Calculate the market equilibrium price and quantity.
b. In a graph, identify and calculate the size of the deadweight loss (DWL).
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.