Question

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 the good in our market?

f) Suppose there were another good in our market and I calculated a cross-price elasticity of et = -1.2 What does this imply about the relationship between both goods?

Answer #1

Ans. b) equilibruim price is $ 3 and quantity is 3 units

d) calculated price elasticity of demand implied that when price changes ( increases/ decreases) by 1% then quantity demand changes ( decrease/ increase) by 3%. the negative sign shows that negative relationship between price and quantity demand. change in quantity demand is -0.09

e) positive income elasticity implies that good is a normal good.

f) both goods are complementary goods.

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

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
or surplus (or neither) develop? What are the price, quantity...

The demand and supply for a good are respectively QD = 16 – 2P +
2I and QS = 2P – 4 with QD denoting the quantity demanded, QS the
quantity supplied, and P the price for the good. Suppose the
consumers’ income is I = 2. 6) Determine the price-elasticity of
demand if P = 2. 7) Determine the income-elasticity of demand if P
= 2. 8) Determine the price-elasticity of supply if P = 4. 9)
Determine consumers’...

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

Suppose that a market is described by the following supply and
demand equations:
QS = 2P
QD = 400 - 3P
Solve for the equilibrium price and the equilibrium
quantity.
Suppose that a tax of T is placed on buyers, so the new demand
equation is
QD = 400 – 3(P+T)
Solve for the new equilibrium. What happens to the price
received by sellers, the price paid by buyers, and the quantity
sold?
Tax revenue is T x Q. Use...

(b) Given the following demand & supply functions for a
product,
qd=4p^2-25p+300 , qs=3p^2-200
Determine the market equilibrium price & quantities?

Consider the following supply and demand functions qD= 8-p qS=
-4 +2p Assuming the market is distortion free, what is the total
welfare level? W= ??

1. Consider a demand curve of the form QD = 40 - 2P, where QD is
the quantity demanded and P is the price of the good. The supply
curve takes the form of QS = -4 + 2P, where QS is the quantity
supplied, and P is the price of the good. Be sure to put P on the
vertical axis and Q on the horizontal axis. a. What is the
equilibrium price and quantity? Draw out the supply...

Consider a market for beer with a demand curve which is: Qd = 25
- 2p and a supply curve which is: Qs = 3P
a) Find the equilibrium price and quantity. Suppose that the
government decided they wished to levy a $2 tax on suppliers.
b) Find the new price paid by the consumer and the price
received by the seller.
c) Based on the tax sharing burden by both the consumer and the
seller, comment on the relative...

1. Consider the following demand and supply functions for a good
or service: Qd = 400 - 5P and Qs= 3P.
a) Graph the supply and demand functions in the typical manner
with price per unit (P) on the Y-axis and quantity on the X-axis.
Make sure to clearly mark X-intercept and Y-intercept on the
graph.
b) What is the slope of each line? Show your calculations.
c) What is the equilibrium price and quantity? Show your
calculations. Show the...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 8 minutes ago

asked 18 minutes ago

asked 25 minutes ago

asked 46 minutes ago

asked 46 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago