Thursday, 12 June 2014
Microeconomics
Suppose that a good is in perfectly elastic supply at price of RM5.00.
The market demand curve for this good is linear, with zero quantity
demanded at a price of RM25.00. If the slope of this linear demand curve
is -0.25 draw a supply and demand graph to illustrate the consumer
surplus that occurs when the market is in equilibrium.
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