Assume a demand function for Coca Cola given as D- 140 - 3P, and a supply function: S-- 20 + 2P. a. Draw demand and supply curves on one graph: (you may draw a graph on a draft paperk b. Calculate and show on a graph eq-m price and quantity: c. Calculate CS, PS and Total surplus; d. Assume a social planner decided to produce 30 bottles of Coca Cola. Calculate DWL: e. Assume the price of Pepsi Cola decreases. Show on a graph and discuss how the change in the price of Pepsi Cola affects TS. (you may draw a graph on a draft paper).
Assume a demand function for Coca Cola given as D- 140 - 3P, and a supply function: S-- 20 + 2P. a. Draw demand and supply curves on one graph: (you may draw a graph on a draft paperk b. Calculate and show on a graph eq-m price and quantity: c. Calculate CS, PS and Total surplus; d. Assume a social planner decided to produce 30 bottles of Coca Cola. Calculate DWL: e. Assume the price of Pepsi Cola decreases. Show on a graph and discuss how the change in the price of Pepsi Cola affects TS. (you may draw a graph on a draft paper).
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:QUESTION 3
Assume a demand function for Coca Cola given as D- 140 - 3P, and a supply function: S. 20 + 2P.
a. Draw demand and supply curves on one graph: (you may draw a graph on a draft paperk
b. Calculate and show on a graph eg-m price and quantity:
c. Calculate CS, PS and Total surplus:
d. Assume a social planner decided to produce 30 bottles of Coca Cola. Calculate DWL:
e. Assume the price of Pepsi Cola decreases. Show on a graph and discuss how the change in the price of Pepsi Cola affects TS. (you may draw a graph on a draft paper).
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