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“Want to see the Titanic up close? That’ll be $130,000.00 – and some courage” (Vancouver Sun...

“Want to see the Titanic up close? That’ll be $130,000.00 – and some courage” (Vancouver Sun Newspaper, Monday, January 22, 2018, p. NP3).

In assignment 2, we determined that the mathematical Inverse Demand curve was: P = 216,400 – 1600 [Qd]. Suppose that in-depth research by the company promoting this once-in-a-lifetime “Titanic up-close experience” found their Inverse Supply curve to be P = 20,000 + 2,037.03[Qs]

  1. Using these values of the Inverse Demand and Inverse Supply curves above, determine the Market Equilibrium PRICE and the Market Equilibrium QUANTITY for the “once-in-a-lifetime Titanic up-close experience.”
    (4 Marks)
  2. Using the information found above in part i, draw a GRAPH illustrating all the necessary points and from where each of the Producer Surplus and Consumer Surplus arise. Then determine the value of each of the PRODUCER SURPLUS and the CONSUMER SURPLUS generated in the market for “once-in-a-lifetime Titanic up-close experience.” (6 Marks)
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