Question: Supply is given by the following equation:

QS =12P -84

Demand is given by the following equation:

QD =636 -18 P

1. Find the equilibrium price and quantity. (4)
2. If the price of the good falls below , firms will not be able to produce the good.
3. Total revenue is equal to price times quantity. Find an equation for total revenue, using the demand equation above. (2)
4. Find total revenue at the market equilibrium. (1)
5. Graph the supply and demand curves. Clearly label values on both axes. Label the market equilibrium. Label consumer surplus and producer surplus on the graph. (5)
6. Calculate consumer surplus, producer surplus, and total surplus. (6)

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