Information on a coffee market is given as below: qs=20p-100 qd=6000/p where p is the price of coffee per tin and q is the quantity of coffee in tins. (a) Draw two functions on a diagram restricting your attention to p E[0, ∞) and q E [0, ∞). (b) Obtain the market equilibrium. What occurs if the price of coffee per tin is $15? (c) Suppose the demand function has changed to q D = 3000/p . Provide an economic explanation of this change and list a few reasons as to why it might have occurred.

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Chapter1: Making Economics Decisions
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Information on a coffee market is given as below:

qs=20p-100

qd=6000/p

where p is the price of coffee per tin and q is the quantity of coffee in tins.

(a) Draw two functions on a diagram restricting your attention to p E[0, ∞) and q E [0, ∞).

(b) Obtain the market equilibrium. What occurs if the price of coffee per tin is $15?

(c) Suppose the demand function has changed to D = 3000/p . Provide an economic explanation of this change and list a few reasons as to why it might have occurred.

(d) Obtain the new market equilibrium. What would happen if the price of coffee per tin stayed the same as the equilibrium price you obtained in (b)?

 

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