13) If the demand for a good is given by: QP = 52-2Pt Q = 3Pt-1-13 Where Q is quantity andP is the price of the commodity. The price is flexible to ensure that the market always clears. a) What is the long term equilibrium price and quantity? b) What is the time path of price c) Suppose now due to a temporal disturbance I the neighboring country, government export 10 units of the commodity, effectively reducing the quantity available on the domestic ,market by 10 What will be the price of the commodity in this initial period? How much output will be produced next year and what will be selling price? i. ii.

13) If the demand for a good is given by: QP = 52-2Pt Q = 3Pt-1-13 Where Q is quantity andP is the price of the commodity. The price is flexible to ensure that the market always clears. a) What is the long term equilibrium price and quantity? b) What is the time path of price c) Suppose now due to a temporal disturbance I the neighboring country, government export 10 units of the commodity, effectively reducing the quantity available on the domestic ,market by 10 What will be the price of the commodity in this initial period? How much output will be produced next year and what will be selling price? i. ii.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

13) If the demand for a good is given by:
Q = 3Pt-1-13
Where Q is quantity andP is the price of the commodity. The price is flexible to ensure
that the market always clears.
QP = 52 - 2Pt
a) What is the long term equilibrium price and quantity?
b) What is the time path of price
c) Suppose now due to a temporal disturbance I the neighboring country,
government export 10 units of the commodity, effectively reducing the quantity
available on the domestic ,market by 10
What will be the price of the commodity in this initial period?
How much output will be produced next year and what will be selling price?
i.
ii.
iii.
3/4
Will the price converge to its long run equilibrium after this disturbance?

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