(i) Calculate the elasticity of demand for the demand curve p = 100 − 2q at each of the following price and quantity levels and determine the type of elasticity: a. p = 90 and q = 2 b. p = 50 and q = 10 c. p = 5 and q = 19 (ii) Suppose you are given the following information: Qs = 200 + 3P Qd = 400 – P where Qs is the quantity supplied, Qd is the quantity demanded and P is price. From this information compute equilibrium price and quantity. (ii) Now suppose that a tax is placed on buyers so that Qd = 400 – (2P + T) where T is taxes. If T = 20, calculate for the new equilibrium price and quantity. (Note: You are solving for the equilibrium price for sellers and buyers).
(i) Calculate the elasticity of demand for the demand curve p = 100 − 2q at each of the following price and quantity levels and determine the type of elasticity: a. p = 90 and q = 2 b. p = 50 and q = 10 c. p = 5 and q = 19 (ii) Suppose you are given the following information: Qs = 200 + 3P Qd = 400 – P where Qs is the quantity supplied, Qd is the quantity demanded and P is price. From this information compute equilibrium price and quantity. (ii) Now suppose that a tax is placed on buyers so that Qd = 400 – (2P + T) where T is taxes. If T = 20, calculate for the new equilibrium price and quantity. (Note: You are solving for the equilibrium price for sellers and buyers).
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
1 (i) Calculate the
a. p = 90 and q = 2
b. p = 50 and q = 10
c. p = 5 and q = 19
(ii) Suppose you are given the following information:
Qs = 200 + 3P Qd = 400 – P where Qs is the quantity supplied, Qd is the quantity demanded and P is price.
From this information compute
(ii) Now suppose that a tax is placed on buyers so that Qd = 400 – (2P + T) where T is taxes. If T = 20, calculate for the new
equilibrium price and quantity. (Note: You are solving for the equilibrium price for sellers and buyers).
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