a) find opportunity cost of the weekly government purchase (Opportunity Cost = Total Revenue – Economic Profit) b)find original demand and the new demand (Qd = a – b(P)) C)find the new price, and the new quantity purchased by those other than the go

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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A project requires signing buying 500 cubic yards of concrete per week for the next year from the only local provider. The currently price is $100 per yard and the provider sells 5,000 yards per week. Assuming marginal cost is constant, elasticity of demand at the current price is -1.5.The METB (marginal excess tax burden) is 0.2.

a) find opportunity cost of the weekly government purchase

(Opportunity Cost = Total Revenue – Economic Profit)

b)find original demand and the new demand

(Qd = a – b(P))

C)find the new price, and the new quantity purchased by those other than the government in the process.

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