Question

In: Economics

1. Assume a market of a specific good. The demand and supply equation is as shown...

1. Assume a market of a specific good. The demand and supply equation is as shown below:

PD=70-3QD

PS=5+2QS

a. Find the equilibrium price

b. Find the equilibrium quantity

c. Find the Consumer Surplus

d. Find the Producer Surplus

e. Find the demand price elasticities at the equilibrium

f. Find the supply price elasticities at the equilibrium

2. Let say that there is an advancement in technology that causes the input cost of the good to decrease. What do you expect to happen to:

a. Equilibrium price

b. Equilibrium quantity

c. Consumer surplus

d. Producer surplus

e. Demand price elasticities at the new equilibrium Supply price elasticities at the new equilibrium

Solutions

Expert Solution

Note: as per chegg guidelines we are supposed to answer 4 subparts.

Rahul Sunny answered 2 years ago
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