solve this a) Assume that the market for home transport of ready-made food from restaurants in a city functions as onfree competition market. As a result, many have chosen to move out of the citythe demand for this type of services fell. At the same time, several new players have established thenas providers of the service. Discuss the impact on the market equilibrium of these changes indemand and supply, and use a diagram to illustrate the reasoning.b) Define the terms consumer surplus, producer surplus and socio-economicprofit. Use a diagram to illustrate the concepts in a free competition market.c) Explain what is meant by the free competition equilibrium is socio-economicefficient.d) Explain what is meant by the term Pareto optimality. Explain the Pareto criterionis an efficiency criterion or a distribution criterion. Is the equilibrium at free competitionParetooptimal?e) The market's demand for a product is given byp = 320 2х,where p is the price of the item and x is the quantity traded. The market's supply curve is given byp = 20 + xFind the market equilibrium during free competition, and calculate the consumer profit,the producer surplus and the socio-economic surplus. Illustrate graphically.f) Assume that the supply side of the market described in problem (d) alternatively consists of amonopoly. Calculate which quantity with the associated price maximizes the monopolist'sprofit. Also calculate the consumer surplus, the producer surplus and thatsocio-economic surplus. Illustrate graphically.g) Take a reasoned position on the following statements: «What is most profitable for a private individualbusiness, is also most profitable for society. "The answer must be justified on the basis of economic theory, and within the framework ofsyllabus for this exam. You are welcome to use moments and relevant calculationsfrom the answer to previous sub-questions in this assignment to illustrate the reasoning.

a) Assume that the market for home transport of ready-made food from restaurants in a city functions as on free competition market. As a result, many have chosen to move out of the city the demand for this type of services fell. At the same time, several new players have established ther as providers of the service. Discuss the impact on the market equilibrium of these changes in demand and supply, and use a diagram to illustrate the reasoning.

a) Assume that the market for home transport of ready-made food from restaurants in a city functions as on free competition market. As a result, many have chosen to move out of the city the demand for this type of services fell. At the same time, several new players have established ther as providers of the service. Discuss the impact on the market equilibrium of these changes in demand and supply, and use a diagram to illustrate the reasoning.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 3PA

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