This assignment further explores how demand and supply shocks effect the equilibrium price in a market. Imagine that the market for acoustic guitars is described by the following demand and supply curves: Qa=A-P Qs = B + SP Where A > 0, B < 0,8 > 0. Find the equilibrium price and quantity in the market. Form the inverse supply and demand functions and, Interpret the terms A and -B/8. Explain why the emergence of a market for guitars requires the following: A > -B/8 > 0.
This assignment further explores how demand and supply shocks effect the equilibrium price in a market. Imagine that the market for acoustic guitars is described by the following demand and supply curves: Qa=A-P Qs = B + SP Where A > 0, B < 0,8 > 0. Find the equilibrium price and quantity in the market. Form the inverse supply and demand functions and, Interpret the terms A and -B/8. Explain why the emergence of a market for guitars requires the following: A > -B/8 > 0.
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
Problem 25P
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d-g please
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How would we go about part G? Concerning parameter B, if it is below or equal to 0, sellers would not enter the market, correct? How does this relate to the rare wood supply shock? Please walk me through part G. Thank you very much.
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