Question

In: Economics

Suppose that a market analysis shows that the demand and supply equations for the market are as follows

Suppose that a market analysis shows that the demand and supply equations for the market are as follows: Qd=120-4P; Qs=6P. Find the equilibrium price and quantity in this market. Now, using graph paper, plot the demand and supply curves carefully and verify that the curves intersect at the equilibrium price and quantity that you found. On your graph, be sure to label your axes and clearly indicate the quantity and price intercept values. (Graph paper is required for this problem; if you do not have access to graph paper, you can print graph paper from the following website:

Expert Solution

The equilibrium is at Qd=Qs

equating both

120-4P=6P

10P=120

P=12

Q=6*12=72 units

=========

to graph it, we need to point on each line and then need to join it

for demand

Q=120-4P

P=0 then Q=120-4*0=120

Q=0 then 0=120-4P so P=30

======

for supply

Q=6P

P=0 then Q=6*0=0

P=20 then Q=6*20=120

Rahul Sunny answered 2 years ago

Suppose that demand and supply for a competitive market are as follows: Qd = 320 -...

Suppose that demand and supply for a competitive market are as follows: Qd = 320 - P and Qs = -40 + 2P What would be the price and output combination that would result if firms in this market merged together to become a profit maximizing monopolist? By how much would the price change from the competitive level?

Suppose the coffee market in the US is given by the following equations for supply and demand:

Suppose the coffee market in the US is given by the following equations for supply and demand: QS = 9 + 0.5p QD = 12 − p where Q is the quantity in millions of tons per year and p is the price per pound.(a) Calculate the equilibrium price and quantity of coffee.(b) At the equilibrium price, what is the price elasticity of demand?(c) Suppose a tax of $0.75 is imposed on coffee producers. Calculate the new equilibrium price and...

Suppose that a market is described by the following supply and demand equations: QS = 2P...

Suppose that a market is described by the following supply and demand equations: QS = 2P QD = 400 - 2P Suppose that a tax of $40 is placed on buyers, so the new demand equation is: QD = 400 – 2(P + 40) a) Solve for the new equilibrium. What happens to the price received by sellers, the price paid by buyers, and the quantity sold? Calculate the new consumer surplus, producer surplus and total surplus. b) Calculate the...

Suppose that a market is described by the following supply and demand equations: Qs = 2P...

Suppose that a market is described by the following supply and demand equations: Qs = 2P Qd = 300 – P A Php 1-tax is imposed on buyers, and another Php 1-tax is imposed on sellers. 1. Calculate the price received by sellers 2. Calculate the price received by sellers 3. Calculate the quantity sold in the market 4. Calculate the government's tax revenue 5. Calculate the loss in economic efficiency as a result of the tax 6. Calculate the...

In a market demand and supply equations are: The demand curve is given as: P =...

In a market demand and supply equations are: The demand curve is given as: P = 50 - 3Q The supply curve is given as: P = 10 + 2Q Assuming a perfectly competitive market: What is the total wealth?

Market supply and demand in a certain market are given by the following equations: Supply: Q...

Market supply and demand in a certain market are given by the following equations: Supply: Q = 4P – 60 Demand: Q = 300 – 5P (a) Compute consumer, producer, and total surplus in this market. (b) The government offers a $9 per-unit subsidy for firms in this market. Compute consumer surplus, producer surplus, government revenue and deadweight loss in this new setting. Are firms better or worse off with the subsidy? (c) Assume now that the government imposes a...

Market demand and supply for a commodity are given by the following equations: Demand: X =...

Market demand and supply for a commodity are given by the following equations: Demand: X = 30 – (1/3) P Supply: X = -2.5 + (1/2) P where X= quantity (units), and P=price per unit ($) Suppose that the government is planning to impose a tax on this commodity and considering the following two options: Option 1: A unit tax of $15 Option 2: An ad valorem tax of 20% a) Find the tax incidence on buyers and producers, and...

The 2020 demand and supply equations for Ontario grapes are as follows: P = $100 -...

The 2020 demand and supply equations for Ontario grapes are as follows: P = $100 - QdCan (1) P = $10 + QsCan (2) As a result of a recent visit by Pottsville’s High Commissioner to this week’s virtual Grape and Wine Festival, the Republic of Pottsville has agreed to buy Ontario grapes. Its demand is given as follows: P = 80-2QdPottsville (10) What are the economic effects of this new demand? Original price (1 mark) Original...

suppose the supply curve and demand curve for the market of shoes is as follows: Qd=30-2p ...

suppose the supply curve and demand curve for the market of shoes is as follows: Qd=30-2p Qs=15+p Find equilibrium P and Q suppose a $2 / unit tax is imposed on the seller. Find the new equilibrium Q, Pb and Ps. Now rework the problem with at $2 / unit subsidy (a subsidy is the opposite of tax)

Suppose the supply curve and demand curve for the market of shoes is as follows: Qd=30-2P...

Suppose the supply curve and demand curve for the market of shoes is as follows: Qd=30-2P Qs=15+P Suppose a $2 tax is imposed on the buyer. Find the new equilibrium Q, Pb and Ps. SHOW YOUR WORK. Suppose a $2 subsidy is imposed on the seller. Find the new equilibrium Q, Pb and Ps. Show your work.