Verify in your diagram and using calculus that this market supply schedule obeys the law of
supply.(5 points)
Part Four: Market Equilibrium
5. Using the market demand and supply functions from questions 3 and 4 (respectively); find the equilibrium price and quantity traded when N=10 and I=10.
Show your work. (5 points)
6. Suppose consumer income decreases to I=5; find the new equilibrium price and quantity traded. Show your work.(5 points)
7. In a well-labeled diagram illustrate the effect on market price and quantity of a decrease in consumer income on the market for oranges (i.e. the
scenario in questions 5&6 above).
However you do not need to label any intercepts or slopes just the original and new equilibrium prices and quantities.(5 points)