Open Word and answer the following questions. Save the document and print it when you are done.
1. From the CSandPS sheet, use Solver to find the optimal quantity. Take a picture of the cells that contain your answer and paste it in your Word doc.
2. With linear supply and demand, PS and CS are given by the following functions:
Use these functions to set up and solve the OOSP's optimization problem. Show your work. Hint: Remember that if Q is greater than the intersection of supply and demand, we must subtract the rectangle given by (supply price minus demand price) times quantity.
3. Do the answers to questions 1 and 2 agree? Is this surprising? Explain why or why not.
4. Use the PriceControls sheet to set a price floor at $120 per unit. Click the Show DWL button. Take a picture of the chart with this price floor. Explain the deadweight loss triangle.