(c) Let the demand and supply functions for a given commodity beQa = a - BpQ: = - y+ ốpwhere (a, B, n, 8 > 0) and Qa and Q, are quantity demanded and quantity supplied(i)Assuming that the market is cleared at every point of time, find the time path P(t)(general solution).Does this market have dynamically stable intertemporal equilibrium price? ExplainWhat is the market clearing equilibrium priceState the role of the complementary function and particular integral in relation to theequilibrium.(ii)(iii)(iv)

Given, Qd = a - Bp Qs = - γ + dp where (α, β, δ, γ > 0) and Qd and Qs are quantity demanded and…

Answered: (c) Let the demand and supply functions…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The lockdown around the world has caused the rapid growth in the electronic market as people have shifted from conventional methods to the new methods for imparting knowledge and staying connected. If demand and supply function are given as: Qd= 65 – 10P Qs= -35 + 15P Find the equilibrium price and quantity and show it on labeled D/S diagram. How do you interpret market equilibrium: (i) if P= Rs.6? (ii) if P=2? Show on the Demand-Supply diagram in (a), the graphical interpretation of your answer of (b)
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?
- Suppose that we need to develop a model to help us to allocate a resource between two time periods: Period 1 and Period 2. Demand can be characterized in both periods as: P = 20-2Q. In both periods the marginal cost of extracting the resource is constant at $4 per unit. The total quantity of the resource that is available to allocate between the two periods is 18 units (in other words, Q1 + Q2 <= 18). Assume that the discount rate is 5%. What is the marginal user cost? a) 0; b) 0.76; c) -2; d) 1.9 Shark
Bread demand function: Q = 100 + 0,5 1 - 30P1+ 20P2, where Q is the annual value of demand; I is income; P1 is the price of bread; P2 is the price of pasta. Define : 1) the function of the annual demand for bread with an income of 10 thousand rubles per month and the price of pasta 250 rubles per 1 kg; 2) the price at which the demand for bread will be zero. Construct the demand curve for bread.
QUESTION 22 Suppose again that a market demand schedule for a resource is P = 200 - 4Q and the market supply schedule is P = denoted as t=1. The marginal user cost (MUC) is negative at the intertemporal (i.e., dynamic) equilibrium when r= 0.10. Is it true or false? 80 + 2Q. There are two periods only, current period, denoted as t=0, and second, True False QUESTION 2 Suppose once again that a market demand schedule for a resource is P = 200 - 4Q and the market supply schedule is P = second, denoted as t=1. What is the Total User Cost (TUC) at the intertemporal equilibrium when r = 0.10? 80 + 2Q. There are two periods only, current period, denoted as t-0, and O A. TUC = $120.0 %3D O B. TUC = $74.83 OC. TUC = $28.50 O D. TUC = $0.00 %3D %3D
Q2 The market equilibrium price and quantity of a good may be found by solving the simultaneous equations: Q + 3P = 48 (1) Q – 2P = 30 (2) (a) Explain which of these equations represents the supply curve and which represents the demand curve. (b) If the demand curve were to be drawn with Q on the horizontal axis and P on the vertical axis, state the values of the slope and vertical intercept. (c) Determine the equilibrium price and quantity algebraically.
ts
a) Derive the goods market demand curve in terms of the output (Y) and the exogenousvariables:c0,c1,b0,b1,g0,g1andT. Show your work for full credit. b)Draw the Goods Market Equilibrium. Be sure to label all curves, label the equilibrium point, and label the slope of each curve. c)Solve for the equilibrium output (Y) in terms of the exogenous variables:c0,c1,b0,b1,g0,g1andT. Show your work for full credit. d)Supposeg1increases, but stillc1+b1+g1<1. Using a graph of the goods market, show how we would represent an increase in the value ofg1on equilibrium output y. Be sure to label all axes, curves, and equilibrium points. e)Suppose instead,c1+b1+g1= 0. Is the equilibrium in the goods market still possible? If so, what is the equilibrium output? You must explain your answer to receive full credit.
Q6
The demand and supply of pizza is defined by the following equations: Qd = D(P, Y ) = 1 + Y − 2P Qs = D(P, PM) = 2 P/PM where, Qd is quantity demand, P is the price of each pizza sold, Y is the average income of consumers, Qs is the quantity supplied, and Pm is the price of inputs used in the production of pizza. (a) List the endogenous and exogenous variables of this model (b) Find the equilibrium price Pe and quantity Qe of pizza as a function of the exogenous variables. (c) Use a simple demand and supply diagram to show what happens to the equilibrium price and quantity when there is an increase in one of the exogenous variables.
By equating the Demand Curve ??? = 24 − 2 ?? and Supply Curve ??? = 4?? equations;(a) Determine the equilibrium price and equilibrium quantity.(b) Also verify your answers.
The demand function for apples is the following. Qn = 10 – Pn + 0.2Y +0.5 Pc – 2Ps + 0.2A Where: Qn = annual sales of apples (millions of kilos) Pn = price of apples (£1 per kilo) Y = disposable income in the UK £trillions (£10 trillions) Pc = price of a pies £ per kilo (£2 per kilo) Ps = price of pear (£2 per kilo) A = advertising measured in hundreds of thousands of £5 (use as 5 in your calculations) What direction should the apple producers move the price if they wanted to maximize their revenue? a. There is not enough information. b. Don't change the price. c. Cut the price. d. Raise the price.

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