Market research has revealed the following information about the market for lamps: The demand schedule can be represented by the equation QD = 24– 3P, where QD is the quantity demanded and P is the price. The supply schedule can be represented by the equation QS= 4 + 2P, where QS is the quantity supplied. (Show all your work). a) Sketch the demand and supply curves, carefully labeling your intercepts. b) Calculate the equilibrium price (P*) and quantity (Q*) in the market for lamps. c) If the market price was artificially set at P=$6, what kind of imbalance would this create in the market (surplus or shortage)? Of exactly how much?
a) Sketch the demand and supply
b) Calculate the
c) If the market price was artificially set at P=$6, what kind of imbalance would this create in the market (surplus or shortage)? Of exactly how much?
d) If the market price was artificially set at P=$2, what kind of imbalance would this create in the market (surplus or shortage)? Of exactly how much?
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