Question

Hugh, Frank, and Luis are the only three buyers of gold in a small mining town. Their inverse demand functions for gold are as follows: Hugh: p = 128.00 – 64.00 l , Frank: p = 96.00 – 48.00 xlf, Luis: p = 8.00 – 4.00 x QL. QhQF, and QL are the quantities (in ounces) demanded by Hugh, Frank, and Luis, respectively. Below, give all answers to two decimals. v 1st attempt Part 1 (1 point) Suppose the price of an ounce of gold is p = $8.00. The total ounces of gold demanded in this market is

Answer 1

The demand functions are, p = 256 – 329 0x = 8 -5.. (1) p= 64 -897 Q=8 - ...(2) p=16-29 Q: =8--p....(3) Compute total demand functions as follows: Q = Qu + +Q; 81 P +8 (11 1 24-1- +-+- (328 2 Q=24, where p 516 And, Q=16 - 3p, where 16 < p < 64 And,

Q=8-, where 64< p < 256 1. Suppose the price of gold is $4. The total ounces of gold demanded in this market is, Q=24 - 21 (4) Q=21.375 2. Suppose the quantity demanded is 12.88 ounces. The market price of an ounce of gold must be, Q-16-ed 12.88 = 16 p=3.12 p= 3.1232 p=19.968