Question

The demand and supply functions of a given competitive market are provided as follows: Qd = 100 – 2P Qs = 70 + 3P You are required to; (a) Find the equilibrium price and quantity sold. 7 marks (b) Assuming that the government of Ghana has imposed GH¢2.00 per unit tax on the good in the market. What will be the new equilibrium price and quantity in the market? 11 marks

Answer #1

in
a competitive market, demand is described by qd = wpp - 5p, and
supply is qs = 100 + 5p. suppose a specific or unit tax of $10 per
unit of quantity traded is imposed on the consumers. what is the
equilibrium quantity after the tax is imposed?
qd=
200 -5p

1. The market demand and supply was given as follow: Qd = 10 –
2P Qs = -5 + 3P
a) Compute for the Price equilibrium
b) Compute for the Quantity equilibrium
c) Plot/graph the following equation.
2. Given the equation, find the equilibrium price and quantity
of the following market and plot the equation. 13P – Qs = 27 Qd +
4P – 24 = 0

Consider the following supply and demand functions
qD = 12-3p
qS = -3 + 2p
a) Plot the supply and demand functions.
b) What are the equilibrium price and quantity?
c) At the equilibrium price and quantity, what is the price
elasticity of demand?
d) Interpret the price elasticity of demand. How much will
quantity change if the price increases by 1%?
e) Suppose I were to calculate an income elasticity of e = 0.5
What does this imply about...

Suppose that a market has the following demand and supply
functions (normal): Qd = 10-P and Qs = 2P-2.
If the government imposed a $3/unit excise tax on producers in
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If the government imposed a $3/unit excise tax on producers in
this market, what would be the value of consumer surplus?
If the government imposed a $3/unit excise tax on producers in
this market, what would be the DWL?
If...

Consider the market for butter in
Saudi Arabia. The demand and supply relations are given as
follows:
Demand:
QD = 12 - 2P
Supply:
Qs = 3P - 3.
P is the price of butter.
Calculate:
Equilibrium price _____________
2. Equilibrium quantity _____________
Consumer surplus
___________
4. Producer surplus ___________
Draw the demand and supply graphs. Show the equilibrium price
and quantity, consumer surplus and producer surplus in the graph
below. Graphs must be on scale.
Suppose government imposes...

A market is described by the following supply and demand
curves:
QS = 2P
QD = 400 - 3P
Solve for the equilibrium price and quantity.
If the government imposes a price ceiling of $70, does a
shortage or surplus (or neither) develop? What are the price,
quantity supplied, quantity demanded, and size of the shortage or
surplus?
If the government imposes a price floor of $70, does a shortage
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please justify as possible not by hand ... The demand and supply
functions for seats on a special shuttle flight from Dubai to
Jeddah, Saudi Arabia, have been estimated as follows: Qd =
90-2P+.05Y -0.5W+1.25Pc Where: Qd = quantity demanded; P = price; Y
= Income; W = weather; Pc = price of competition; Qs = -20-5Pf +3P
Where: Qs = quantity supplied; Pf = price of fuel; Assuming: Y =
100, W = 70, Pc = 16, a) Derive...

The demand and supply functions for seats on a special shuttle
flight from Dubai to Jeddah, Saudi Arabia, have been estimated as
follows:
Qd
= 90 - 2P + .05Y - 0.5W +
1.25Pc
Where: Qd = quantity demanded; P
= price; Y = Income; W
= weather; Pc = price
of competition;
Qs
= - 20 - 5Pf +
3P
Where: Qs = quantity supplied; Pf = price of
fuel;
Assuming:
Y = 100, W =
70, Pc...

The demand and supply functions for seats on a special shuttle
flight from Dubai to Mekah have been estimated as follows;
Qd=90-2P+.05Y-0.5W+1.25Pc
where Qd= quantity demanded , P=price , Y= income , W = weather,
Pc= price of competition;
Qs=-20-5Pf+3P
where Qs= quantity supplied , Pf= price of fuel;
assumimg Y=100, w=70; Pc=16 ; Pf=6
a);Derive the demand equation
b)Derive the supply equation
c) determine the equilibrium price and quantity.
d) what is the price elasticity of demand at the...

Consider the following market. Demand is given by qd = 150 – 2P,
where qd is the quantity demanded and P is the price. Supply is
given by qs = P, where qs is the quantity supplied.The government
implements a tax of $30 per unit to be paid by consumers. What is
the new market equilibrium? What is the economic incidence of the
tax (that is, who pays for the tax)? How would your answer change
if the government implemented...

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