Consider production of cotton blankets. Assume demand function for such blankets is given as D = 250 – 2P, while supply is given as S = - 50 + P. a) Calculate equilibrium price and quantity produced; b) Show on a graph and calculate CS, PS and TS. Assume there is extremely hot weather destroyed cotton fields. c) What will happen to equilibrium price and quantity. Explain your answer. d) What will happen to TS?
Consider production of cotton blankets. Assume demand function for such blankets is given as D = 250 – 2P, while supply is given as S = - 50 + P. a) Calculate equilibrium price and quantity produced; b) Show on a graph and calculate CS, PS and TS. Assume there is extremely hot weather destroyed cotton fields. c) What will happen to equilibrium price and quantity. Explain your answer. d) What will happen to TS?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider production of cotton blankets. Assume
given as D = 250 – 2P, while supply is given as S = - 50 + P.
a) Calculate
b) Show on a graph and calculate CS, PS and TS.
Assume there is extremely hot weather destroyed cotton fields.
c) What will happen to equilibrium price and quantity. Explain your answer.
d) What will happen to TS?
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