Question

Consider the following market for a crop:

Demand: Q_{D} = a - bP = 18 - 0.5P

Supply: Q_{S} = c+dP = -2 + 0.5P

**[Insert an image of your graph here]**

1. What is the equilibrium price and quantity?

2. What is the elasticity of demand at the equilibrium? What is the elasticity of supply at the equilibrium?

3. What is the total revenue (price times quantity) of suppliers at the equilibrium?

4. Suppose that the crop is larger and
supply is now Q_{S} = 4 + 0.5P Add the new curve to your
graph. What is the new equalibrium price and quantity?

5. What is the total revenue of suppliers at the new equilibrium?

6. What is the elasticity of demand at the new equilibrium?

7. Is demand elastic or inelastic at the two points? What does this mean for farmers when the crop is larger?

Answer #1

Consider a market that can be represented by a linear demand
curve, QD = 200 – 2PD, (where QD is the quantity demanded and PD is
the price that demanders pay) and a linear supply curve that QS = ½
PS (where QS is the quantity supplied and PS is the price that
suppliers get).
a. What is the equilibrium price?
b. What is the equilibrium quantity?
c. What is demand elasticity at the equilibrium point?

Suppose the market demand curve for a product is given by
QD=100-5P and the market supply curve is given by
QS=5P
a. What are the equilibrium price and quantity?
b. At the market equilibrium, what is the price elasticity of
demand?
Suppose government sets the price at $15 to benefit the
producers.
What is the quantity demanded?
What is the quantity supplied?
What is the amount of the surplus?
Suppose market demand increases to Qd=200-5P.
What is the new equilibrium...

Consider a market for beer with a demand curve which is: Qd = 25
- 2p and a supply curve which is: Qs = 3P
a) Find the equilibrium price and quantity. Suppose that the
government decided they wished to levy a $2 tax on suppliers.
b) Find the new price paid by the consumer and the price
received by the seller.
c) Based on the tax sharing burden by both the consumer and the
seller, comment on the relative...

1. Consider the following demand and supply functions for a good
or service: Qd = 400 - 5P and Qs= 3P.
a) Graph the supply and demand functions in the typical manner
with price per unit (P) on the Y-axis and quantity on the X-axis.
Make sure to clearly mark X-intercept and Y-intercept on the
graph.
b) What is the slope of each line? Show your calculations.
c) What is the equilibrium price and quantity? Show your
calculations. Show the...

Consider the following general demand and supply functions for a
given commodity.
Qd=a-bp
Qd=-c+dp
a. Find the equilibrium price and quantity [4 Marks]
b. Suppose that a fixed tax t is imposed on the product in
question, what is the new equilibrium price and quantity. [6
Marks]
d. Express the value of t in terms of a, b, c, d, and p. [3
Marks]
e. Use iii. Above to write the expression for government
revenue. [2 Marks]
f. Suppose that...

1. A.
Suppose excellent weather leads to a larger than normal tomato
crop. If there is a relatively small change in price compared to
the change in quantity resulting from this large crop, what does
this imply about the price elasticity of demand for tomatoes?
it is relatively elastic
it is relatively inelastic
it is perfectly elastic
it is perfectly inelastic
b. If the price elasticity of demand for tomatoes is -1.25 and
quantity changes by 3% due to this...

Consider a free, open and competitive market where the market
demand and market supply lines determine the equilibrium price and
quantity of the product bought and sold.
Now, due to new and improved technology the firms use to
produce the product, the market supply of the product has increased
and as a result there is a new equilibrium price and quantity
bought and sold.
Explain what will happen to the total expenditure of the
consumers (increase, decrease, remain the same)...

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)

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...

The supply curve for pianos is given by the following: Qs =
p-6000. Further, the demand curve for pianos is given by Qd = 18000
– 2p. Let ed be the own price elasticity of demand and
es the own price elasticity of supply. In the market
equilibrium for pianos:
Group of answer choices
ed is elastic and es is inelastic
ed is inelastic and es is elastic
ed is elastic and es is elastic
ed is inelastic and es...

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