Question

w w er this midterm. Please submit your solutions to Gradescope by 2 pm on Tuesday, 3/31. The test has 80 points total. Read each question carefully as important details have changed relative to the questions bank. 1 Long Questions (50 points total) Q1 (5pts) Suppose that global demand and supply for a standard one-bedroom apartment in Berkeley North are described by the equations: Qp = 1500 – 30P Os = --300 + 30P where QD and Qs are respectively the number of apartments demanded and supplied and P is the monthly rent for each apartment, expressed in hundreds of US$. . Please calculate the equilibrium price that will clear this market and the accompanying equilibrium quantity. • Please draw a graph of the supply curve and demand curve and label the equilibrium quantity and price. • UC Berkeley becomes more popular than ever. More students are expected to join the university than ever before. As a result, quantity demanded increases by 20 units at any given price. Please compute the new equilibrium and label it on your graph from the previous question. 22 (15pts) ased on market research, a rural gas station with monopoly power obtains the following information out the demand and production costs of the gas it sells (quantity is in gallons, price in cents): Inverse Demand/MPB : P = 1000-5Q Marginal Revenue : MR = 1000 - 100 Manimal Private Cost: MPC = 100+ 25Q

Answer 1

As per HOMEWORKLIB RULES in case of multiple questions only the first question is to be answered

Kindly ask rest of the questions in a separate post

1.

A)

Equilibrium takes place at the point demand = supply

That is,

1500-30P = -300+30P

1800 = 60P

P* = $30

Q* = 600

B)

Graph is below:

Equilibrium takes place at point A with price of $30 and quantity of 600 units

C)

New demand curve: D = 1500-30P + 20 = 1520 - 30P

New equilibrium:

Demand = supply

1520-30P = -300+30P

1820 = 60P

P' = $30.3

Q' = 610

New equilibrium point is point B in graph above.