Fill in the blanks below with decimal numbers (not fractions):
Suppose the demand for a product can be modeled with the equation P = 100 − 2Q and the corresponding supply curve can be modeled with P = 3Q.
In equilibrium, _____________units of the good will be sold at a price of $ ________each.
At $66, the quantity demanded is __________units.
At $51, the quantity supplied is ________units
The deadweight loss of a $66 price floor would be $_________
In equilibrium, quantity demanded is equal to the quantity supplied so that we have
100-2Q=3Q
Q=100/5= 20 units. Price= 3*20 = $60
Therefore in equilibrium 20 units of the good will be sold at a price of $60.
When the price is $66 quantity demanded is 17 units
When the price is $51 the quantity supplied is 17 units.
At a price floor of 66 dollar, quantity demanded is 17 units and quantity supplied is 22 units.
Deadweight loss is given by 0.5*(66-51)*(20-17) = 22.50
Fill in the blanks below with decimal numbers (not fractions): Suppose the demand for a product...
Suppose the demand for a good is modeled by the equation Q = 5 - 3P, and the supply for the good is modeled by Q = 2 + P. Fill in the blanks below with decimal answers (i.e. no fractions). The equilibrium quantity of the good will be ________ and the equilibrium price will be ________.
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