The
A: Draw the demand and supply functions. What is the price-elasticity of demand? What is the price-elasticity of supply?
B: Find the equilibrium quantity and price, and show them on the graph.
C: Suppose due to the rising health awareness the demand decreases to Q d=5-p. Find the new
D: Suppose that the demand and supply are as before, i.e. Qd=10-p and Qs=4p-10, but now the government imposes a quantity tax on the suppler at the rate of 1 per unit of the quantity. What quantity will be sold and what price?
E: In part d), what is the total amount of tax collected by the government? How this tax amount is divided between the demanders and supplier? Who pays more and why? Explain
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- Q.2. Suppose the demand of a particular product is represented by the following linear demand function Demand for Product Y = 200- 4P Calculate the quantity demand at the market prices $10, $20, $30, $40, and $50. Construct a demand schedule in a table and plot the demand curve for this demand function.arrow_forwardSuppose that the inverse demand curve for a product is given by: P = 100-Qd+ 2M, where M is the average income in 1000 USD. The inverse supply is P = 0.5Q - 20. If M = 15 the equilibrium price is equal to and the equilibrium quantity is equal to 40, 60 100,30 30,100 60.40arrow_forward) If the price of good X increases from RM3 to RM5, the quantity demanded drops from 10 to 12. Find the slope of the demand curve. a) 0.2 b) 5 c) -1 d) -2 Other: 8) Based on Question 7, calculate the quantity when the price is equal to 0 a) 13 b) 2 c) 10 d) 5 9) Based on Question 7, if the market price is equal to 1, determine how many units of good X will be sold in the market. a) cannot be determined b) 12 c) 10 d) 14 Oh no! Our expert couldn't answer your question. Don't worry! We won't leave you hanging. Plus, we're giving you back one question for the inconvenience. Here's what the expert had to say: (7) - wrong data. "quantity demanded drops from 10 to 12" is wrong since value from 10 to 12 is an increase, not a drop. Ask Your Question Again 6 of 10 questions left until 1/15/21 Question I. If the price of good X increases from RM3 to RM5, the quantity demanded drops from 10 to 12. Find the slope of the demand curve.…arrow_forward
- Consider two markets: the market for waffles and the market for pancakes. The initial equilibrium for both markets is the same, the equilibrium price is $6.50, and the equilibrium quantity is 35.0. When the price is $9.75, the quantity supplied of waffles is 57.0 and the quantity supplied of pancakes is 101.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for pancakes. Please round to two decimal places. Supply in the market for waffles isarrow_forwardBelow are the supply and demand schedules for a video game. Price $200 $180 $160 $140 $120 $110 $100 $90 $80 $60 Quantity Demanded 10 15 20 25 30 35 40 45 50 55 Quantity Supplied 100 90 80 70 60 50 40 30 20 10 a) What is the equilibrium price? $ b) What is the equilibrium quantity? Assume that this video game receives a poor rating and consumers decide to purchase 45 less at each price. c) What is the new equilibrium price? $ d) What is the new equilibrium quantity? 100 40 units unitsarrow_forwardLet the supply and demand functions for raspberry-flavored licorice be given by p = S(q) = q and p = D(q) = 90 - q ,where p is the price in dollars and q is the number of batches. Graph these functions on the same axes (graph the supply function as a dashed line and the demand function as a solid line). Also, find the equilibrium quantity and the equilibrium price.arrow_forward
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