Question

Please help!

Assume that a competitive market is currently represented by the following supply and demand equations: Qd 110- P+5C P is the price of the product, N is the number of producers, and C is the number of consumers. There are currently 10 producers and 2 consumers. 1. (2 Points) Solve for the equilibrium price and quantity given the current number of producers and consumers 2. (2 Points) Write the equilibrium price and quantity in a general form that allows the number of producers and consumers to vary. (HINT: your answers will be written as functions of C and 3. (1 Point) How many consumers must enter the market in order for the equilibrium price to increase by $1? 4. (1 Point) What effect (in terms of direction and magnitude) does the exit of one producer have on the equilibrium quantity?

Answer 1

The Given data Assumes that a competitive market is currently represented by the following supply and demand equations are Q_s = 4p - 40 + 4 N Q_d = 110 - p + 5c where the p is price of product N is the no. of produces c is the no .of consumers rightarrow Now currently there are 10 produces and the 2 consumers At equilibrium, Q_s = Q_d 4p = 40 + 40 = 110 - p + 5c 5p = 110 + 5 c + 40 - 4 N 5p = 150 + 5c - 4N p = 30 + c - 4/5 N implies N = 10 t c = 7 p^2 = 30 + z - 4/5 (10) = 30 + 2 - 18 = 32 - 8 = 24 Q^x = 110 - 24 + 5 (2) = 110 - 24 + 10 = 120 - 24 Q^x = 96 \r\n P^x = 30 + c - 4/5 N Q = 110 - 30 - c + 4/5 N + 5 c