Question

the market demand and supply curves of a commodity are represented as p=10 2Qd and p=2...

the market demand and supply curves of a commodity are represented as p=10 2Qd and p=2 + 2Qs. what is the equilibrium price? What is the coefficient of the price elasticity of demand? would u increase the price of the good?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Market demand

P=10-2Qd

Market supply

P=2+2Qs

In equilibrium

Market demand=Market supply

10-2Q=2+2Q

2Q+2Q=10-2

4Q=8

Q=8/4

Q=2 units of output

Substituting Q into price equation

P=10-2Qd

P=10-2(2)

P=10-4

P=$6

since the coefficient of price elasticity of demand is (-1.5) which is elastic, so with the increase in the price of the good, the quantity demand will decrease more rapidly compare to change in the price. Hence it is not good to increase the price of the good.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Assume that demand for a commodity is represented by the equation P = 10 - 0.2Q...
Assume that demand for a commodity is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. Find equilibrium price and quantity (algebraically). Then graph the supply and demand lines, plot equilibrium point and label axes, equilibrium P* and Q*, vertical and horizontal intercepts for demand curve, and vertical intercept for the supply curve.
Q4. Assume that demand for a commodity is represented by the equation P = 10 -...
Q4. Assume that demand for a commodity is represented by the equation P = 10 - 0.2Qd and supply by the equation P = 2 + 0.2Qs, where Qd and Qs are quantity demanded and quantity supplied, respectively ,and P is price. Using the equilibrium condition Qs = Qd, solve the equations to determine equilibrium price and equilibrium quantity. Graph the two equations to substantiate your answers. Answer in the space below!
The demand for pizza is represented by P= 10-Qd/4, and the supply of pizza is represented...
The demand for pizza is represented by P= 10-Qd/4, and the supply of pizza is represented by Ps= 4+1s/2, and Q in thousands and P in dollars. The market for pizza is perfectly competitive. Suppose a price floor of $1 was set above the equilibrium price. What would be the result?
Given the following inverse demand and supply functions: P = 44 – 2QD P = 12...
Given the following inverse demand and supply functions: P = 44 – 2QD P = 12 + 2QS (a) Determine the equilibrium quantity and the equilibrium price. (b) If the government imposes a $8/unit tax on the seller, determine the after tax equilibrium quantity and price. How much of the tax is paid by the seller and the buyer? (c) If the government now imposes a $10/unit tax on the buyer instead, determine the after tax equilibrium quantity and price....
1: Assume that demand for a commodity is represented by the equation P = 10 –...
1: Assume that demand for a commodity is represented by the equation P = 10 – 0.2 Q d, and supply by the equation P = 5+ 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condition Qs = Qd 1: Solve the equations to determine equilibrium price. 2: Now determine equilibrium quantity. 3: Graph the two equations to substantiate your answers and label these two graphs...
Assume that demand for a commodity is represented by the equation P = 20 – 0.6...
Assume that demand for a commodity is represented by the equation P = 20 – 0.6 Q d, and supply by the equation P = 10 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condition Qs = Qd 1: Solve the equations to determine equilibrium price. 2: Now determine equilibrium quantity. 3: Graph the two equations to substantiate your answers and label these two graphs...
Assume that demand for a commodity is represented by the equation P = 20 – 0.6...
Assume that demand for a commodity is represented by the equation P = 20 – 0.6 Q d, and supply by the equation P = 10 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condition Qs = Qd 1: Solve the equations to determine equilibrium price. 2: Now determine equilibrium quantity. 3: Graph the two equations to substantiate your answers and label these two graphs...
Assume that demand for a commodity is represented by the equation P = 20 – 0.6...
Assume that demand for a commodity is represented by the equation P = 20 – 0.6 Q d, and supply by the equation P = 10 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condition Qs = Qd 1: Solve the equations to determine equilibrium price. 2: Now determine equilibrium quantity. 3: Graph the two equations to substantiate your answers and label these two graphs...
Assume that demand for a commodity is represented by the equation P = 20 – 0.6...
Assume that demand for a commodity is represented by the equation P = 20 – 0.6 Q d, and supply by the equation P = 10 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condition Qs = Qd 1: Solve the equations to determine equilibrium price. 2: Now determine equilibrium quantity. 3: Graph the two equations to substantiate your answers and label these two graphs...
The demand and supply curves for a good are given by QD = 50 – 2P...
The demand and supply curves for a good are given by QD = 50 – 2P and QS = P – 1. Calculate the price elasticity of demand at the equilibrium price. Calculate the price elasticity of supply at the equilibrium price. What would happen to consumer expenditures on the good if firms must pay higher prices for their inputs in production?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT