Question

0.01 U. LACR of private property protection X c. A large increase in population d. All the above e. A and B only Use the following information for the next 4 questions. Suppose the demand and supply for rotisserie chickens is given by the following equations, where is in thousands of chickens and P is in dollars. -0.005 Q = 11-P P-2 = 0.01 QS P=11 - 0.005Q QD = .11- QS P-2 P=2+0.010$ 0.005 19. The equilibrium quantity and price in this market is -2, - 0.01 0.005 a. (600 000 chickens, $8 per chicken) b. (8000 chickens, $600 per chicken) (0.00 SP - 0.01) = -0.11 + O OIP c. (1 800 000 chickens, $2 per chicken) 0.1 = 0.005P d. (600 chickens, $8 per chicken) P = 20 20. When the above market is in equilibrium, consumer expenditure can be calculated as the number of units purchased times the price per unit. What is consumer expenditure equal to when the rotisserie chicken market is in equilibrium? a. $4800 000 b. $8 c. $680 000 d. $2 400 000 21. Suppose the government imposes a price floor of 6$ per chicken to aid farmers. This price floor will result in a. A shortage of chickens b. No effect, price floor is non-binding

(Repost as I noticed I didn't give much information in my last one)

I am trying to do question #19, but I can't seem to solve for P... please help :-(

Answer 1

Answer : 19) The answer is option a.

At equilibrium Demand = Supply occur. So,

11 - 0.005Q = 2 + 0.01Q

=> 11 - 2 = 0.01Q + 0.005Q

=> 9 = 0.015Q

=> Q = 9 / 0.015

=> Q = 600

As Q is in thousands hence equilibrium quantity is 600,000 chickens.

Now by putting the value of Q = 600 in demand function we get,

P = 11 - (0.005 * 600)

=> P = $8

Therefore, here the equilibrium price is $8 per chicken.

So, option a is correct.

20) The answer is option a.

When the market is in equilibrium then the price is $8 per chicken and the quantity demanded = quantity supplied = 600,000.

So, consumer expenditure = Price * Quantity demanded = 8 * 600,000 = $4,800,000

Therefore, option a is correct.