Question

Unit 7-Market Intervention: Price Ceilings and Floors, Taxes Suppose that the demand curve for coffee is Q = 10-P and the supply curve is Q = P. Draw the supply and demand curves below. NWU1000 2 3 4 5 6 7 8 9 10

not sure what equation to use to find the supply and demand curves

Answer 1

Q = 10-P (Q+ P=10] -0 by nemard Curve. Q = P - Q =P) - ① Lo supply curve (0,10), supply 12-1) E Equilibrium I Point v Demand (Q+P = 10) 10,07 at (1010) Quantity. 1. Equilibrium Onautity demanded = Quantity 10-P= P (P = 5] The equilibrium price (p²) = 5 Lequin bniem Quantity (Q)=5 0 consumer Suphes = Area of triangle BCE - x Base theique - LXBCX BE = 4 x 110-5) (5) = 12.5

Consunus Suples $12.5 ] = $1205 producu Surplus = Area of a friangle ABE -AX ABX BE - fx5x5 = 12.5 produca suples $12-5] Constances Stripers t Product Surphen Total suples - 1. = 12.5 12.5 25 [Tos=825] P 1. Price floor = 87 (0,10)ck ts supply 3 At p = 87 Onantity demanded be 3. 70-7 pos > Demana Quantity supplied be 7 1 (0,0) A (Sa) 50 : 76=7 Qs > O mean suples Suples = Q-Oo >7-334 New Quanhly in the coffee market be 4