Question

Microeconomics:

15. Assume we are given a demand schedule that is represented by P = 100 – 12 Q and a supply schedule where P = 10 + 14 Q, where P = Price and Q = Quantity.

What is the equilibrium price and quantity?

• a) $750; 75 units.

• b) $40; 120 units.

• c) $500; 100 units.

• d) $52.50; 95 units.

Suppose that the supply schedule from question #15 changed to P = 5 + 12 Q. What net effect does this supply change have on equilibrium price and quantity compared to the original equilibrium?

• a) $52.50; 95 units.

• b) $250; 25 units.

• c) $12.50; 20 units.

• d) $47.50; 15 units.

Answer 1

PLEASE NOTE THAT THE EQUATIONS ARE NOT AS PER THEIR ORIGINAL FORM. FOR EXAMPLE, THE DIVISION SIGN IS NOT VISIBLE AT ALL. HOPEFULLY, I HAVE CONSIDERED THE EQUATION CORRECTLY. PLEASE CHECK.

SOLUTIONS