None Given the quantity demand and quantity supply equations as below, answer the followingquestions: QD = 625-5P and Q = 175+5Pa) Find out market clearing price, quantity demand, and quantity supply.b) Given this demand and supply equations, analyse how the producers (Say, farmers) andconsumers of the good will react to a minimum support price (MSP) of Rs. 50 per unit for the goodannounced by the government. Explain through both mathematical and diagrammaticalrepresentation.[15+15]

a) Finding the Market Clearing Price, Quantity Demanded, and Quantity Supplied Market Clearing Price…

Answered: Given the quantity demand and quantity…

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

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(a) The demand for petroleum is given by QD=85 − 0.4? where Q Dis the quantity demanded in thousands of barrels per day and P is the price per barrel in dollars. The supply of petroleum is given by QS=55+0.6?. Calculate the equilibrium price and quantity in this market. (b) In the context of the problem in part (a), calculate the demand and supply for petroleum if the market price is $15 per barrel. What problem exists in the economy.
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