7. Suppose the demand for lychees is given by the following equation: 100P 500PM, where P...
I was able to answer 1a and 1b -- but I'm stuck on C, D and E (you can disregard F and G unless you wanna answer them) NOTE: Staple your assignment together before turning it in. I. Suppose the industry demand function for bacon takes the following form where Qd is the quantity of bacon demanded, P, is the price of bacon, P, is the price of sausage, and Pe is the price of eggs If Pb-10, P, and...
Suppose the demand for jackets is given by Qd = 120 – P, and the supply of jackets is given by Qs = -30 + 2P. Solve for the equilibrium price. Plug the equilibrium price back into the demand equation and solve for the equilibrium quantity. Double-check your work by plugging the equilibrium price into the supply equation and solving for the equilibrium quantity. Does your answer agree with what you got in (b)? Solve for the elasticity of demand...
Suppose these are the market demand and supply curves for hooded sweatshirts: Supply: P = 10 + 2QS Demand: P = 50−3QD (a) Sketch these two curves (that is, draw them, but don’t worry about numerical accuracy). Calculate equilibrium price and quantity. Calculate equilibrium price and quantity. (b) Show on your graph the areas of consumer and producer surplus. Calculate consumer and producer surplus at the equilibrium from part a. (c) Calculate the price elasticity of demand when price changes...
Question #4: Price Elasticity of Demand [14 Points]Suppose that the demand function for crab cakes is equal to 1200−=PQD(a) Using calculus calculate the price elasticity of demand when P = $20. [8 Points] (b) Is demand for crab cakes elastic, unit-elastic, or inelastic? Briefly explain [2 Points] (c) By how much should producers cut the price in order to sell 25% more crab cakes? Question #5: Elasticity [22 Points] Consider the market for an Italian cookbook. Demand for the Italian...
2. Demand and supply equations for Good X is given as: Demand: P=6 - (1/50) Q and Supply: P= 1 + (1/100) Q [P: Price, Q: Quantity] i. Given the above information find the equilibrium price and quantity for Good X. ii. What is the point elasticity of demand at equilibrium? Is it elastic, inelastic or unitary elastic? iii. What is the point elasticity of supply at equilibrium? Is it elastic, inelastic or unitary elastic? iv. If the price increases...
5. Suppose the demand and supply functions are given by QD 15-P Qs- P-5, where QD and Qs are the quantities and P is the price. a) Graph the demand curve and supply curve. [Hint: label each axis, the price and quantity b) Calculate the equilibrium price and quantity; add these values to the graph and label them as c) Suppose demand decreases by 1 unit at each price. What is the new demand function? Add the d) Calculate the...
Suppose the supply curve for apples is given by QS = 2P, where QS is the quantity offered for sale when the prices is P. Also, suppose the demand curve for apples is given by QD = 182 − 4P I, where QD is the quantity of apples demanded when the price is P and the level of income is I. a) Find the equilibrium P and Q when I = 6. b) Find price-elasticity of demand at the equilibrium...
Suppose that the price elasticity of demand of a good is -3. Its demand is _________ and the percentage change in its quantity demanded is ________ than the percentage change in its price. A. Elastic: Smaller B. Elastic: Greater C. Inelastic: Smaller D. Inelastic: Greater Which of the following is not a determinant of the price elasticity of demand? A. Availability of substitutes B. Degree of necessity C. Cost relative to income D. Availability of inputs With a(n) ______ demand,...
Problem Set 1 Due Date: Wednesday, January 25,2017 1. Consider the following demand function of an individual for good 1: where p" p2, ps are the prices of good 12, and 3, respectively, and Y represents the income the individual. Suppose good 1 and 2 are substitutes while good 1 and 3 are complements. (a) Describe in words what B,,B,, B, and B, measure. (b) Can you say anything about the expected signs of p.B.B, and B, in the demand...
3. Suppose the demand function for a firm's product is given by In Q 7-1.5 In P 2 In P, -0.5 In M +InA where P = $15, P, = $6, M $40,000, and A $350. a. Determine the own price elasticity of demand, and state whether demand is b. Determine the cross-price elasticity of demand between good X and good c. Determine the income elasticity of demand, and state whether good X is a d. Determine the own advertising...