Question

The inverse demand function: ?=20−??2−3??, and the supply function: ??=3/2? are given. Calculate the equilibrium price...

The inverse demand function: ?=20−??2−3??, and the supply function: ??=3/2? are given.
Calculate the equilibrium price and calculate the equilibrium quantity.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The demand function is:

P = 20 - Q2 - 3Q

The supply function is:

Q = 3/2P =

P = 2/3Q = 0.67Q      [This is inverse supply function]

At equilibrium,

Demand = Supply

20 - Q2 - 3Q = 0.67Q

-Q2 - 3Q - 0.67Q + 20 = 0

-Q2 - 3.67Q + 20 = 0

By solving the quadratic equation for Q,

Since quantity can not be negative, therefore, the equilibrium quantity (Q) = 3.

P = 20 - Q2 - 3Q

   = 20 - (3)2 - 3(3)

   = 20 - 9 - 6

   = $5

Thus, the equilibrium price is $5 and equilibrium price is 3 units.

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
Suppose that supply and demand are given by and ?? = 20 − 2? ?? =...
Suppose that supply and demand are given by and ?? = 20 − 2? ?? = ? − 7 A. Determine the equilibrium price and quantity B. What are the inverse supply and demand functions? C. What would the new inverse supply function b if there were a new ad valorum tax of 10 percent of the sales price payable by the supplier? D. Draw by hand the shift in the supply curve (old and new supply curves) as well...
A firms demand function is Q= 10 - P/6; its supply function is Q= P/3 - 2.
A firms demand function is Q= 10 - P/6; its supply function is Q= P/3 - 2.a) what is the equilibrium quantity?b) What is the equilibrium price?c.) Draw a graph showing the inverse DEMAND function, inverse SUPPLY function, equilibrium price, and equilibrium quantity.Label the axes, the curves, and equilibrium. Also, show the values of the intercepts of the inverse demand and supply functions.
1. Inverse demand is P = 245 – 2Q and inverse supply is P = 20...
1. Inverse demand is P = 245 – 2Q and inverse supply is P = 20 + Q. a. What is the equilibrium price and quantity in this market? b. Graph the supply and demand curves, correctly identifying the intercepts and equilibrium. c. Is the equilibrium quantity in the elastic, unit elastic, or inelastic portion of the demand curve? Explain. d. Suppose inverse supply changes to P = 10 + 0.5Q. Is this an increase or decrease in supply? Graph...
Supply and Demand — End of Chapter Problem The inverse demand for carbon‑steel chef’s knives is...
Supply and Demand — End of Chapter Problem The inverse demand for carbon‑steel chef’s knives is given by ?=120−12??P=120−12QD, where ?P is the price of a chef’s knife, and ??QD is the quantity of chef’s knives desired per week, in thousands. The inverse supply of chef’s knives is given by ?=20+2??P=20+2QS, where ??QS is the quantity of chef’s knives offered for sale each week, in thousands. a. Accurately graph the inverse supply and the inverse demand curves. (pleases draw and...
Supply and Demand — End of Chapter Problem The inverse demand for carbon‑steel chef’s knives is...
Supply and Demand — End of Chapter Problem The inverse demand for carbon‑steel chef’s knives is given by ?=120−12??P=120−12QD, where ?P is the price of a chef’s knife, and ??QD is the quantity of chef’s knives desired per week, in thousands. The inverse supply of chef’s knives is given by ?=20+2??P=20+2QS, where ??QS is the quantity of chef’s knives offered for sale each week, in thousands. a. Accurately graph the inverse supply and the inverse demand curves. b. According to...
The inverse Demand is given by: P=40-0.2Q and the inverse supply is given by: P=0.2Q-20. If...
The inverse Demand is given by: P=40-0.2Q and the inverse supply is given by: P=0.2Q-20. If a price ceiling of $6 is imposed, then Producer surplus and DWL are:  (Hint: it helps to draw a graph for this question).
Suppose that the inverse demand for webcams is given by P = 150 – Q and...
Suppose that the inverse demand for webcams is given by P = 150 – Q and the inverse supply for webcams is given by P = 30 + 2Q. (20 points) If the market for webcams faces a quota of 30 units, then what are the equilibrium price and quantity? (20 points) If the market for webcams faces a quota of 30 units and a tax of $60 per webcam, then what are the equilibrium price and quantity? (10 points)...
Again, consider the same scenario, with inverse demand curve and P=30-Q and supply defined by P=...
Again, consider the same scenario, with inverse demand curve and P=30-Q and supply defined by P= 4Q. Calculate the demand price, supply price, and equilibrium quantity, whether the intervention is effective and draw diagrams in any three cases. Consider a quantity quota Q= 3 imposed by the government Consider a price ceiling of P= 20 imposed by the government Consider a price floor of P= 30 imposed by the government
the inverse supply is p=.2Q-20 and inverse demand is P=40-.2Q. there is a price floor of...
the inverse supply is p=.2Q-20 and inverse demand is P=40-.2Q. there is a price floor of $12, what is the producer and consumer surplus
Suppose that the (inverse) demand for Sugar in the US is given by, P= 75-2 Qd...
Suppose that the (inverse) demand for Sugar in the US is given by, P= 75-2 Qd where P = price per bulk bag (in dollars) and Qd = quantity demanded (in millions of bulk bags). Suppose the (inverse) supply of sugar is given by, P= 3 Qs where P = price per bulk bag (in dollars) and Qs = quantity supplied (in millions of bulk bags). a.) Find the equilibrium price and quantity of sugar exchanged in the US market,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT