Question

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 as D1 and S1. 4: Furthermore; using demand and supply show what happen to equilibrium price and quantity if eating this product causes cardiac problem.

Answer #1

*answer...*

*1) P = 20 - 0.6 Q d*

*0.6 Q d = 20 - P*

*Q d = 20 / 0.6 - P / 0.6
...........(1)*

*P = 10 + 0.2 Q s*

*P - 10 = 0.2 Q s*

*P / 0.2 - 10 / 0.2 = Q s
............(2)*

*Equate 1 and 2 , that is Q d = Q s*

*20/0.6 - P/0.6 = P/0.2 - 10/0.2*

*20/0.6 + 10/0.2 = P/0.2 + P/0.6*

*33.34 + 50 = 10 P / 2 + 10 P /6*

*83.34 = 40 P / 6*

*83.34 * 6 = 40 P*

*500.04 / 40 = P*

*Thus equilibrium price = $ 12.501*

*2) Equilibrium quantity*

*Q d = 20 / 0.6 - P /0.6*

*Q d = 20 / 0.6 - 12.501 / 0.6*

*Q d = 33.34 - 20.835 = 12.505*

*3) The following are the graphs of Demand curve and
supply curve depicted as D 1 and S 1 respectively. The two
equations are graphed by substituting the values quantity in the
equations. Demand curve is downward sloping curve whereas supply
curve is upward sloping curve.*

Assume that demand for a commodity is represented by the
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1: Solve the equations to determine equilibrium price.
2: Now determine equilibrium quantity.
3: Graph the two equations to substantiate your answers and
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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
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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 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...

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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.
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where Qd and Q s are quantity demanded and quantity supplied,
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3: Graph the two equations to substantiate your answers and
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