Question

Suppose the global Soybean market is competitive and currently
has the following supply and demand functions: Q_{D} = 700
– 0.5P_{S} and Q_{S} = P_{S} – 500.

The market expects to see a 25% increase in the market price within a year due to change in demand. What will be the new equilibrium price and equilibrium quantity of the market keeping all other things constant?

New P*= New Q*=

Answer #1

Answer New price = 1000 and New Quantity = 500 units

Given,

Qd = 700 -0.5P

Qs = P-500

At equilibrium quantity demanded is equal to quantity supplied.

700 -0.5P = P-500

1200 = 1.5P

P = 800

Now equilibrium price is expected to increase by 25%

Therefore new equilibrium price is equal to

P = 800 +(.25*800) = 1000

At this price

Qd = 700 -0.5P

Qd = 700 –(0.5*1000) = 200

&

Qs = P-500

Qs = 100-500 = 500

We know that at equilibrium quantity demanded is equal to quantity supplied. Thus additional 300 units are expected to be generated on demand side.

1. [10 pts] Assume that the market demand and supply curves for
soybeans grown in Canada
can be represented via the following:
QD = 40 − 0.5Ps. Qs = 2.5 +
2.5Ps
where PS is the soybean price ($/bushel) and QS is the quantity
of soybeans produced (denominated
in 100 million bushel units).
(a) [10 pts] What is the equilibrium price, P*s, and
quantity, Q*s, of soybeans?

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

The corn market is perfectly competitive, and the market supply
and demand curves are given by the following equation: Qd
=50,000,000 – 2,000,000 p Qs = 10,000,000 +5,500,000 p Where Qd and
Qs are quantity demanded and quantity supplied measured in bushels,
and P= price per bushel.
1) Determine consumer surplus at the equilibrium price and
quantity.

Let the market demand curve be QD=8-P
and the market supply curve be QS=P. Let
price P be measured in $/unit and let quantity Q
be measured in singular units (i.e. simple count).
Solve for the equilibrium price P* and
quantity Q*.
Now, assume the government imposes a $2/unit tax on consumers,
which leads to wedge/gap between the buyers’ price
Pb and the sellers’ price
PS.
Rewrite the demand and supply curves using Pb
and PS, respectively.
Write down the...

Estimate the equilibrium price and quantity of the market whose
demand and supply functions are pd = - (q + 4)^2 + 100 and ps = (q
+ 2)^2 respectively

Suppose the market for bottled water is competitive and is
characterized by the following demand and supply conditions. The
inverse demand and supply curves are depicted below.
Demand: QD = 400 – 100 P
Supply: QS = 280 + 20 P (for P >
0)
Price:
Quantity:
Consumer surplus:
Producer surplus:
Suppose in anticipation of an approaching hurricane, demand
rises to QD = 800 – 100 P. What will happen in the
market, including welfare effects, as measured by consumer...

15) In a competitive market, the market supply and market demand
functions are given by QS = 4p and QD = 100 ? p respectively. The
government imposes a $10 tax per unit traded in the market. How
much revenue does the tax generate for the government in the short
run?
a) ..........$0
b) ..........$800
c) ...........$720 (+) d) ...........$700
e) ...........$820
16) Refer to question 15. How much revenue does the tax generate
for the government in the long...

Suppose the market for corn is given by the following equations
for supply and demand:
QS = 2p − 2
QD = 13 − p
where Q is the quantity in millions of bushels per year and p is
the price.
Calculate the equilibrium price and quantity.
Sketch the supply and demand curves on a graph indicating the
equilibrium quantity and price.
Calculate the price-elasticity of demand and supply at the
equilibrium price/quantity.
The government judges the market...

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)

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...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 9 minutes ago

asked 9 minutes ago

asked 25 minutes ago

asked 32 minutes ago

asked 38 minutes ago

asked 41 minutes ago

asked 42 minutes ago

asked 42 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago