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Question:
(a) The market demand schedule and market supply schedule for firm H is as follows:
QD = 500 - 10P QS = -100 + 6P
Where QD and QS denotes quantity demanded and quantity supplied respectively and P denotes price.
(i) Calculate the equilibrium price and quantity.
(ii) If a maximum price of Rs. 20 is imposed, what is the resulting shortage?
(iii) Estimate the revenue that can be generated from black market following the shortage.
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