Suppose that the demand for toy drums is described by the equation Qp = 300 - 5p, and supply is Qs = 60+ 3p, (1) What are the equilibrium price and quantity? (2) If a decrease in consumer income shifted the demand curve to Q=220-5p, how does this change affect the equilibrium price and quantity? Show the solutions using a graph and calculate the numerical answer.

Equilibrium condition is that condition where Demand is equal to supply. In this demand and supply…

Answered: Suppose that the demand for toy drums is described by the equation Qp = 300 - 5p, and supply is Qs = 60+ 3p, (1) What are the equilibrium price and quantity?…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN: 9780190931919

Author: NEWNAN

Publisher: Oxford University Press

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Question 1
Suppose that the demand for toy drums is described by the equation Qp = 300 - 5p, and supply
is Qs = 60+ 3p,
(1) What are the equilibrium price and quantity?
(2) If a decrease in consumer income shifted the demand curve to Q = 220-5p, how does
this change affect the equilibrium price and quantity?
Show the solutions using a graph and calculate the numerical answer.

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