Question

E) Solve the mathematical problems below: 1. The demand and supply curves for hotdogs in California are given by the following two equations QD = 8,000 - 800P QS = 2,000 + 200P Where QD represents quantity demanded, QS represents quantity supplied and P represents price. a. Find the equilibrium quantity and price: b. If students suddenly acquire a greater taste for hotdogs, which of the following would be the new demand curve? Circle the correct equation: QD = 6,500 - 800P QD = 9,500 - 800P Find the new equilibrium quantity and price: c. If instead one of the stores selling hotdogs goes out of business, which of the following might be the new supply curve? Circle the correct equation: Q S = 1,200 + 200P QS = 2,800 + 200P Find the new equilibrium quantity and price: 2. Consider the following supply and demand model of the world tea market in billions of pounds.) Price per Pound Quantity Supplied Quantity Demanded $0.38 1,500 525 $0.37 1,000 600 $0.36 700 700 $0.35 600 900 $0.34 550 1,200 a. Is there a shortage or surplus at $0.38 per pound? b. Is there a shortage or surplus at $0.34 per pound? c. Find the equilibrium quantity How big? How big? and price: Graph the supply and demand curves and label the equilibrium, also correctly label your curves and the axes.

Answer 1

Due to presence of HOMEWORKLIB POLICY, I am answering first question.

E.

1.

a.

Equilibrium:

Demand = Supply

QD = 8000 - 800P = QS = 2000 + 200P

6000 = 1000P

P = 6

Q = 3200.

b.

Greater taste implies greater willingness to pay. So, new demand curve is: QD = 9500 - 800P

Equilibrium:

Demand = Supply

QD = 9500 - 800P = QS = 2000 + 200P

7500 = 1000P

P = 7.5

Q = 3500.

c.

One of the stores getting out of business implies reduced market supply. So, new supply curve is: QS = 1200 + 200P

Equilibrium:

Demand = Supply

QD = 9500 - 800P = QS = 1200 + 200P

8300 = 1000P

P = 8.3

Q = 2860.

If you are satisfied with the answer, please provide a positive rating. Feel free to comment in case of queries.

Have a nice day ahead!