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1. Numerical analysis of supply and demand: Consider the following demand and supply functions that provide information on the market for coffee beans: Qd 50- 2P PT Qs 10+3P where P is the price per pound of coffee beans, Pr is the price per pound of tea, and Qd and Qs are the quantity demanded and the quantity supplied of coffee beans in thousands of pounds. (a) Assuming that Pr 10, graph the market with a clearly labeled graph and calculate the equilibrium price (P*) and quantity (Q*) for the market of coffee beans. (b) What is the price elasticity of demand at the equilibrium price and quantity you found in part (a). Interpret (c) Find the cross-price elasticity for coffee beans and tea at the market equilibrium. Interpret your numerical (d) Suppose that following severe flooding and landslides in areas that grow tea, the price of tea increases to your numerical result. result. P 15. Calculate the new equilibrium price (P**) and quantity (Q) for coffee beans and illustrate the changes on your graph from part (a).

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