11 a. Consider a demand curve of the form. b. QD = -2P + 20 where Qp is quantity demanded of a good and P is the price of the good. Also consider a supply curve of the form Qs = 2P - 4 where Qs is the quantity supplied. Graph these curves. At what values of P and Q do these curves intersect? Now suppose at each price individuals demand four more units of output, i.e. the demand curve shifts to Qp = -2P +24, Graph this new curve. At what values of P and Q does the new demand curve interest the old supply curve?
11 a. Consider a demand curve of the form. b. QD = -2P + 20 where Qp is quantity demanded of a good and P is the price of the good. Also consider a supply curve of the form Qs = 2P - 4 where Qs is the quantity supplied. Graph these curves. At what values of P and Q do these curves intersect? Now suppose at each price individuals demand four more units of output, i.e. the demand curve shifts to Qp = -2P +24, Graph this new curve. At what values of P and Q does the new demand curve interest the old supply curve?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:11 a. Consider a demand curve of the form.
b.
QD = -2P + 20 where Qp is quantity demanded of a good and P is the price
of the good. Also consider a supply curve of the form Qs = 2P - 4 where Qs
is the quantity supplied. Graph these curves. At what values of P and Q do
these curves intersect?
Now suppose at each price individuals demand four more units of output,
i.e. the demand curve shifts to Qp = -2P + 24, Graph this new curve. At
what values of P and Q does the new demand curve interest the old supply
curve?
Transcribed Image Text:10. Suppose that the demand for crude oil is given by:
QD = 85 -0.4P, where Qp is the quantity in millions of barrels per day and P is
price per barrel in dollars.
Suppose also that the supple for crude oil is given by:
Qs = 55 +0.6P
a) Calculate equilibrium price and quantity in this market.
b) Calculate the "excess demand" for crude oil if the market price is $15.00
per barrel.
c) Calculate the "excess supply" of crude oil if the market price is $50.00
per barrel.
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