ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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the answer for number 23 would be -1.9 right?
![### Market Supply and Demand Analysis
---
#### Question 22
Assume a market supply function is given by the equation:
\[ Q_s = -7 + 0.6P \]
where \( Q_s \) is the quantity supplied and \( P \) is the price. If \( P \) equals 15, the value of the producer surplus is closest to:
- **A.** 3.3
- **B.** 41.0
- **C.** 67.5
---
#### Information for Questions 23 through 25
The market demand function for four-year private universities is given by the equation:
\[ Q^{d}_{pr} = 84 - 3.1P_{pr} + 0.81I + 0.9P_{pu} \]
where \( Q^{d}_{pr} \) is the number of applicants to private universities per year in thousands, \( P_{pr} \) is the average price of private universities (in thousands of USD), \( I \) is the household monthly income (in thousands of USD), and \( P_{pu} \) is the average price of public (government-supported) universities (in thousands of USD). Assume that \( P_{pr} \) is equal to 38, \( I \) is equal to 100, and \( P_{pu} \) is equal to 18.
---
#### Question 23
The price elasticity of demand for private universities is closest to:
- **A.** -3.1
- **B.** -1.9
- **C.** 0.6
---
### Explanation of Concepts
- **Market Supply Function:** This equation describes the relationship between the price and the quantity of a good that producers are willing to supply. The constant term indicates the base level of supply, while the coefficient of \( P \) shows how supply changes with price.
- **Market Demand Function:** This equation captures the factors influencing the demand for a product, showing how various economic variables like price, income, and substitute goods (public university prices) affect the number of applicants to private universities.
- **Price Elasticity of Demand:** This measures the responsiveness of the quantity demanded to a change in price, indicating whether demand is elastic or inelastic.
Understanding these functions and concepts helps in analyzing market dynamics and predicting consumer behavior.](https://content.bartleby.com/qna-images/question/4abc14fd-1500-4ee9-8fa7-9cc23d3b6fd5/34c6b22f-2719-4f9b-a33e-9804d286f82a/1q2fjv5_processed.jpeg)
Transcribed Image Text:### Market Supply and Demand Analysis
---
#### Question 22
Assume a market supply function is given by the equation:
\[ Q_s = -7 + 0.6P \]
where \( Q_s \) is the quantity supplied and \( P \) is the price. If \( P \) equals 15, the value of the producer surplus is closest to:
- **A.** 3.3
- **B.** 41.0
- **C.** 67.5
---
#### Information for Questions 23 through 25
The market demand function for four-year private universities is given by the equation:
\[ Q^{d}_{pr} = 84 - 3.1P_{pr} + 0.81I + 0.9P_{pu} \]
where \( Q^{d}_{pr} \) is the number of applicants to private universities per year in thousands, \( P_{pr} \) is the average price of private universities (in thousands of USD), \( I \) is the household monthly income (in thousands of USD), and \( P_{pu} \) is the average price of public (government-supported) universities (in thousands of USD). Assume that \( P_{pr} \) is equal to 38, \( I \) is equal to 100, and \( P_{pu} \) is equal to 18.
---
#### Question 23
The price elasticity of demand for private universities is closest to:
- **A.** -3.1
- **B.** -1.9
- **C.** 0.6
---
### Explanation of Concepts
- **Market Supply Function:** This equation describes the relationship between the price and the quantity of a good that producers are willing to supply. The constant term indicates the base level of supply, while the coefficient of \( P \) shows how supply changes with price.
- **Market Demand Function:** This equation captures the factors influencing the demand for a product, showing how various economic variables like price, income, and substitute goods (public university prices) affect the number of applicants to private universities.
- **Price Elasticity of Demand:** This measures the responsiveness of the quantity demanded to a change in price, indicating whether demand is elastic or inelastic.
Understanding these functions and concepts helps in analyzing market dynamics and predicting consumer behavior.
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