Question

The market of natural gas is described by the following supply and demand equations: Qs=14+2PG+.25P0 Qd=-5PG...

The market of natural gas is described by the following supply and demand equations: Qs=14+2PG+.25P0 Qd=-5PG +3.75P0 where Qs represent the quantities supplied and demanded of natural gas (in millions of cubic feet), PG represents the price of natural gas (per cubic foot) and P0 represents the price of oil (per barrel).

a) If P0 = 6, find the equilibrium price and quantities of natural gas.

b) Find the new equilibrium price and quantities if P0 doubles (from 6 to 12).

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
The market of natural gas is described by the following supply and demand equations: Qs =...
The market of natural gas is described by the following supply and demand equations: Qs = 14 + 2 PG + .25 P0 Qd = -5 PG + 3.75 P0 where Qs represent the quantities supplied and demanded of natural gas (in millions of cubic feet), PG represents the price of natural gas (per cubic foot) and P0 represents the price of oil (per barrel). a) If P0 = 6, find the equilibrium price and quantities of natural gas. b)...
A market is described by the following supply and demand curves: QS = 2P QD =...
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...
Suppose the corn market has the following equations: QD = 3000 - 400P QS = 900...
Suppose the corn market has the following equations: QD = 3000 - 400P QS = 900 + 300P Where QD and QS are quantity demanded and quantity supplied measured in bushels, and P = price per bushel. Determine consumer surplus at the equilibrium price and quantity. 6 marks Assume that the government has imposed a price floor at $3.50 per bushel and agrees to buy any resulting excess supply. How many bushels of corns will the government be forced to...
Consider an economy described by the following equations: QD = 30M - 2P QS = (1-t)P...
Consider an economy described by the following equations: QD = 30M - 2P QS = (1-t)P -5 QD = QS where QD is quantity demanded, QS is quantity supplied, M is the income of consumers, and t is the tax rate (with 0 < t < 1). Consider the vector of endogenous variables X = [ QD P QS ] T . 1)Write the model in matrix form. 2) Does the model have a unique solution? Explain. 3) Solve the...
Suppose that a market is described by the following supply and demand equations: QS = 2P...
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...
Suppose that the market demand and supply for milk is given by Qd =120−6P and Qs...
Suppose that the market demand and supply for milk is given by Qd =120−6P and Qs = 12P − 60 a. Find the market equilibrium quantity, and the equilibrium price. (5 points) b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus (or shortage) if a price floor of $11 is imposed in this market. (5 points) c. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus (or shortage) if a price...
The European Union (EU) and United States (US) demand and supply equations for corn are: QDEU...
The European Union (EU) and United States (US) demand and supply equations for corn are: QDEU = 70 – 2 PEU QSEU = 20 + 3PEU QDUS = 130 – 3PUS QSUS = 30 + PUS where QD and QS represent the quantities demanded and supplied in both countries (in billions of tons) and P represents the Dollar price per ton of corn in each country. a. Graph the US and European Union supply and demand curves for corn (what...
Suppose demand and supply are given by Qd = 60 - P and Qs  = 1.0P -...
Suppose demand and supply are given by Qd = 60 - P and Qs  = 1.0P - 20. a. What are the equilibrium quantity and price in this market? Equilibrium quantity:   Equilibrium price: $   b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $52 is imposed in this market. Quantity demanded:   Quantity supplied:   Surplus:   c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price...
Let QD be the quantity of a good demand and QS the quantity supplied. The equations...
Let QD be the quantity of a good demand and QS the quantity supplied. The equations are assumed to be linear to facilitate calculations. Let P=100− 2QD and MC = 2QS Find the socially efficient equilibrium output, price, and the total net bene
Suppose in the U.S. natural gas market, estimated price elasticity of demand is 0.05, estimated price...
Suppose in the U.S. natural gas market, estimated price elasticity of demand is 0.05, estimated price elasticity of supply is 0.1, the equilibrium price is $50 per mcf (thousand cubic feet), equilibrium quantity is 20 tcf (trillion cubic feet) a. Find demand and supply functions for natural gas? b. suppose the discovery of natural gas field increases supply by 2 tcf at all price levels. Calculate the effect of this increase in production on equilibrium price of natural gas.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT