Question

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?

Answer #1

QD=50-P

QS = P-1

for equilbruim, QD=QS

50-2P = P-1

P = 51 /3 = 17

Q = 50-2*17

Q = 16

for price elasticity of demand, we take partial derivate of QD with respect to P

= -2

elasticity = * P */ Q*

elasticity = -2 * 17 / 16

elasticity = -2.125

elasticity of supply

= 1

elasticity = 1 * 17/16

elasticy = 1.0625

the consumer expenditures increase on the good , when firms pay higher prices for thier input in production because the price of the good will increase and consumer have to pay more for the same quantity of good .

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’...

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...

3. Market demand for a good is given by QD= 30- 2P and its
market supply is given by QS=P - 6.
(a) Determine the market equilibrium quantity (QM) and price
(PM) .
(b) If marginal external benefit is 3 at all levels of
consumption (i.e. MEB=3), then what is the socially efficient level
of production (Q*)?
-Provides some work to justiy your answers.

The demand and supply curves for Fuji apples are given by
QD = 50 – 6P and
QS = 4P – 2, where P is price
per bag and Q is in thousands of bags. What are consumer
surplus and producer surplus at the equilibrium price?
Answer Choices:
CS = $29,422; PS = $44,180
CS = $15,006; PS = $7,657
CS = $856,000; PS = $1,126,113
CS = $450; PS = $375

Question 2. The market supply and demand curves for a product
are:
QS=0.5P (supply curve)
QD=60–2P (demand curve)
where Q is the quantity of the product and P is the market
price.
(1). Calculate the equilibrium price, equilibrium quantity and
total social welfare. (10 points)
(2). Suppose that the market has changed from a perfectly
competitive market to a monopoly market, calculate the new
price–output combination and the total deadweight loss in the
monopoly market. (10 points)

1. Demand and supply curves can be represented with equations.
If Qd = 90 - 2P and Qs = P, then equilibrium price P* and
equilibrium quantity Q* are
a. P* = 30, Q* = 60
b. P* = 60, Q* = 30
c. P* = 30, Q* = 30
d. P* = 60, Q* = 60
2.
Suppose that scientists find evidence that coffee consumption
lowers cholesterol. If so,
a. demand for coffee would remain the same
b. quantity...

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...

A demand curve and supply curve for video games are given
respectively as follows:
QD= 72‒ 2P + 2M
QS = 8 + P
Where M represents consumer income. Suppose that last year,
consumer income was M= $40. Find the equilibrium price and quantity
of video games at that income level. In addition, suppose that this
year, consumer income is M= $55. Find the equilibrium price and
quantity of video games at this new income level. Draw the graph of...

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...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 12 minutes ago

asked 49 minutes ago

asked 49 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 3 hours ago

asked 3 hours ago

asked 3 hours ago

asked 3 hours ago

asked 4 hours ago