Question

Q2. Sub Mart Inc. needs to decide the optimal price to charge and the optimal quantity to supply in the market. The demand function of the product is given as QD=40-2P, while the supply function of the product is given as QS=2P where P is the price, QD is quantity demanded, and QS is quantity supplied. Solve the following demand function is given as: QD=40-2P. Calculate the equilibrium price and quantity. (5Marks)

Q3. Consider the demand for apples. If the prices of a
substitute good(bananas) increases and the price of a complement
good (apple pie) increases, can you tell for sure what will happen
to the demand for apples? Why or why not? (**Illustrate your
answer with a graph, software program )**

Answer #1

Q2) at eqm, Quantity Demanded = Quantity supplied

40-2P = 2P

40= 4P

**P*= 10 , Q*= 2*10= 20**

Q3)

If price of substitute good rises, then demand for Apples will rise, & it's Demand curve will shift to right

If price of Complements good rises, then demand for Apples will decrease, & demand curve will shift to left

Thus net effect on demand could be

1) increase, when rightwards shift is more than left shift

2) Decrease, when left shift outweighs right shift

3) unchanged, the two opposing effect cancels out each other

Consider the demand for apples. If the prices of a
substitute good(bananas) increases and the price of a complement
good (apple pie) increases, can you tell for sure what will happen
to the demand for apples? Why or why not? Illustrate your answer
with a graph.

Consider the demand for apples. If the prices of a substitute
good(bananas) increases and the price of a complement good (apple
pie) increases, can you tell for sure what will happen to the
demand for apples? Why or why not? Illustrate your answer with a
graph

- Consider the demand for apples. If the prices of a substitute
good(bananas) increases and the price of a complement good (apple
pie) increases, can you tell for sure what will happen to the
demand for apples? Why or why not?
(Someone answered that question before. I need another
answer.)

Assume a demand function is given by Qd=40-2P+4Ps-2Pc+5Y and a
supply function is given by Qs=16+4P-6Pi, where Ps, Pc, and Pi are
the price of a substitute, complement, and input to production
respectively. How does a $1 increase in the price of a substitute
change the equilibrium price and the equilibrium quantity?

At a price of P15, quantity demanded for CDs was 36. When the
price increased to P20, the quantity demand for CDs fell to 32.
When the price fell to of P10, demand rose to 40. And when price
was at P25, demand decreased to 28.
a. Find the linear function that describes this demand
behavior
b. Given the supply function Qs = -7+2P find the
equilibrium price P* (round off to the nearest whole
number) and quantity Q*

Show, using a supply & demand graph, the effect on the
equilibrium price and quantity of the good in question of the
following events. Assume markets are initially in equilibrium.
These are qualitative answers. An original and new market
equilibrium on the graph is needed. Show that clearly.
The market for Apples is initially in equilibrium. Suppose the
price of Pears, a substitute for Apples, declines while at the same
time more Apple Orchards are opened, so more firms enter...

55)Suppose Qs is the quantity supplied at a given price
for brown rice and Qd is the quantity demanded at the same given
price for brown rice. Which of the following market conditions
produces an upward movement of the price for brown
rice?
(a)Qs =1,000, Qd =860
(b)Qs =850, Qd=850
(c)Qs=750, Qd=1,000
(d)Qs=1,000, Qd=1,000
(57)Which of the following pairs of goods would be
considered complementary?
(a)Coca-Cola and Pepsi
(b)Radios and Televisions
(c)Computers and computer software
(d)Compact discs and cassette tapes...

1.Given: Suppose you are given the following market demand
function for apples:
QD = 100*I + 2*PSub − P
where P is the price per unit of apples, I is
consumer income and PSub is the price per unit of
grapes (a substitute for apples). And given the market supply
function for apples:
QS = P − 2*w − 4*m
where P is the price per unit of apples, w is the
hourly wage rate the firm pays to workers...

The equilibrium price for a product is $38, and the quantity
sold of the product is 2280. The price elasticity of demand is
-4.2, and the price elasticity of supply is 0.3. Find the demand
curve and the supply curve for the product. (Your answer for the
demand curve should be in the form Qd = a – bP, with specific
numerical values given for a and b. Your answer for the supply
curve should be in the form Qs...

Part A. Consider the market for apples where the market demand
is given by QD = 30 − 2p and market supply is given by QS = P Find
the market equilibrium. What will be the quantity traded if an
excise tax of $2/unit is imposed? Calculate the deadweight loss of
the excise tax.
Part B. Consider the same market from question #1. Consider that
you are the only seller in that market and you produce apple for a
marginal...

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