Part I. Suppose that from the data gathered, the individual demand and supply functions for product Xare given by Eq. 1 and Eq. 2 respectively were derived,Qdx = 3.7 0.74Px + 0.00091 + 0.28PyQsx = -119.33 + 69.38PX - 13.88CEq. 1Eq. 2where Px - price of product X; I - weekly income; Py - price of product Y; and C - cost of production.Use the following additional information: the weekly income is P4,485; the price of a related product, Y,is P37.45; the cost of production is P19.50; there are 500 buyers and 16 sellers in the market for productX.1. Derive the market demand function.2. From (1), what is Px that will make all the buyers stop purchasing this product? Round-up to twodecimals.units of this product; beyond this amount,3. The consumers will want to consume a maximum ofthey will experience lesser satisfaction.4. Derive the market supply function.5. From (4), sellers will not sell anything if Px is equal to6. What is the equilibrium price in this market? Round-up to six decimals.7. What is the equilibrium quantity? Use the value of Pe from (6).8. Assume the price of product X is P22.72, is there an excess demand or supply? How much?9. Assume the price of product X is P26.13, is there an excess demand or supply? How much?10. If the price of X increases from P15 to P17, what is the coefficient of sensitivity of all the buyers giventhis price increase? Round-up to two decimals. Identify the degree and interpret this coefficient.11. Suppose the average income of the buyers decreases to P4,200 and the price of X is P20. Betweenthese two income values, if income will change by 1%, how much will the demand for product X ofthe buyers change? Round-up to two decimals. What will be the classification of product X?12. Between the prices P8.50 and P9.50, are the sellers relatively sensitive or insensitive?

Qd$ = 3.7 - 0.74P$ + 0.0009I + 0.28P% Qs$ = -119.33 + 69.38 P$ - 13.88CWeekly income = P4485Price of…

Part I. Suppose that from the data gathered, the individual demand and supply functions for product X are given by Eq. 1 and Eq. 2 respectively were derived, Qdx = 3.7 0.74Px + 0.00091 + 0.28Py Qsx = -119.33 + 69.38Px − 13.88C Eq. 1 Eq. 2 where Px - price of product X; I - weekly income; Py- price of product Y; and C cost of production.

Part I. Suppose that from the data gathered, the individual demand and supply functions for product X are given by Eq. 1 and Eq. 2 respectively were derived, Qdx = 3.7 0.74Px + 0.00091 + 0.28Py Qsx = -119.33 + 69.38Px − 13.88C Eq. 1 Eq. 2 where Px - price of product X; I - weekly income; Py- price of product Y; and C cost of production.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: unit elasticity at the indicated values of p. x = f(p)=2170-5p -0.1p² (A) Describe the demand's…

A: Price Elasticity of Demand: The elasticity of demand is a computation of consumers' response to a…

Q: Let P(g) = { 34 +1, 0 2, be the demand function for a manufacturer's product, where q is the number…

A: In the production process, the conditions and fluctuations that happen between demand and also the…

Q: An economist estimates that a market has a demand curve of the form P = 22 - (0.733) Q and a supply…

A: Answer to the question is as follows:

Q: The question has three parts 1. Graph( attached as an image) 2. graph (attached as an image)…

A: Elasticity of demand refers to the responsiveness of the quantity demanded changes with the changes…

Q: 3. A company wholesales shampoo in a particular city. Their marketing research department…

A: The law of supply and demand joins two fundamental economic standards portraying how changes in the…

Q: We want to "estimate" the supply and demand functions for good X. These functions depend on Px, the…

A: Given Px=6.4, Py=50 and Qx=23 The own price elasticity of supply is 0.2, cross price elasticity of…

Q: You are an economist. Your friend started a new business selling masks. She asked for your help in…

A: Price elasticity of demand refers to the percentage change in quantity demanded due to percentage…

Q: AlphaGas is a retail station which sells gasoline to consumers at the per-gallon price Pr. It is the…

A: The profit maximization condition refers to the economic principle that a firm should produce at a…

Q: uppose that the demand curve for a product is given by Q = 100 – 2 Px + a Py, here Px = £20, where…

A: Elasticity of demand depicts how much consumer responds with the change in price.

Q: Using a linear specification, you estimate your demand curve to equal Q=10-5P+20C+2A, where • Q =…

A: * Demand : Q=10-5P+20C+2A * The elasticity of demand with respect to college-ratio (C) can be…

Q: The demand equation for a firm’s product has been estimated as Ln Qx = 7.3 – 2 Ln Px + 0.5 Ln I +…

A: The price of a good, the per capita income, and the relative price of goods are determinants that…

Q: You are an economist. Your friend started a new business selling masks. She asked for your help in…

A: Price elasticity of demand is the responsiveness of quantity demanded to a change in the price. It…

Q: The formula for the arc price elasticity can be written (where AQ denotes the change in Q) as: h =…

A: Thе arc pricе еlasticity of dеmand mеasurеs thе rеsponsivеnеss of quantity dеmandеd to a changе in…

Q: P1= $4.50 Q1= 45 P2= $5.00 Q2= 40 a) what is price elasticity of demand b) given…

A: Price elasticity of demand depicts how much consumer responds with the change in price.

Q: Price, dollars per pound Quantity, thousand pounds per day 1.90 1.35 1.5 2.2 1.25 1.20 0.95 4.4 5.9…

A: The law of demand refers to the inverse or negative relationship between the quantity demanded of a…

Q: Suppose that daily demand for breakfast sandwiches at a local store is given by the following: Qd =…

A: Given information: Q = 15 - 3P ---------> Demand function; Price elasticity of demand (Point…

Q: Consider the demand function for good1, Q1 = 2037 - 9P1 + 0.6000000000000001P2 - 0.75P3 + 0.07Y…

A: Q1 = 2037 - 9P1 + 0.60P2 - 0.75P3 + 0.07Y Plugging given values, Q1 = 2037 - 9 x 59 + 0.6 x 255…

Q: For the demand function q= D(p)%3D201-p, find the following. a) The elasticity b) The elasticity at…

A: According to the Bartleby guidelines, we answer only the first question in case of multiple…

Q: Q3. Refer to the diagram. Using the midpoint formula, calculate the price elasticity of demand…

A: Ep = (change in quantity)/ (average quantity) / (change in price)/(average price)

Q: 28 24 20 S2 16 S1 12 8 4 D1 D2 4 8 12 16 20 24 Q 14. If this figure depicts the market for product…

A: When two goods are demanded together to satisfy single want, it is termed complementary goods. If…

Question

Part I. Suppose that from the data gathered, the individual demand and supply functions for product X
are given by Eq. 1 and Eq. 2 respectively were derived,
Qdx = 3.7 0.74Px + 0.00091 + 0.28Py
Qsx = -119.33 + 69.38PX - 13.88C
Eq. 1
Eq. 2
where Px - price of product X; I - weekly income; Py - price of product Y; and C - cost of production.
Use the following additional information: the weekly income is P4,485; the price of a related product, Y,
is P37.45; the cost of production is P19.50; there are 500 buyers and 16 sellers in the market for product
X.
1. Derive the market demand function.
2. From (1), what is Px that will make all the buyers stop purchasing this product? Round-up to two
decimals.
units of this product; beyond this amount,
3. The consumers will want to consume a maximum of
they will experience lesser satisfaction.
4. Derive the market supply function.
5. From (4), sellers will not sell anything if Px is equal to
6. What is the equilibrium price in this market? Round-up to six decimals.
7. What is the equilibrium quantity? Use the value of Pe from (6).
8. Assume the price of product X is P22.72, is there an excess demand or supply? How much?
9. Assume the price of product X is P26.13, is there an excess demand or supply? How much?
10. If the price of X increases from P15 to P17, what is the coefficient of sensitivity of all the buyers given
this price increase? Round-up to two decimals. Identify the degree and interpret this coefficient.
11. Suppose the average income of the buyers decreases to P4,200 and the price of X is P20. Between
these two income values, if income will change by 1%, how much will the demand for product X of
the buyers change? Round-up to two decimals. What will be the classification of product X?
12. Between the prices P8.50 and P9.50, are the sellers relatively sensitive or insensitive?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: State the given information

VIEW

Step 2: Derive market demand function

VIEW

Step 3: Find the price at no quantity demanded

VIEW

Step 4: Find the quantity at 0 price

VIEW

Step 5: Derive market supply function

VIEW

Step 6: Find price where nothing is sold

VIEW

Step 7: Find equilibrium price and quantity

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 8 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Assume that the supply and demand equations for 1-shirts at store A and 2 in a particular week are. = .7q+ 3 offer p= - 1.7q + 15 Demand Determine the equilibrium quantity and price that stabilizes the T-shirt market. (1) (4$5.5) (2) (7, $8) (3)($9.5) (4) (5, $6.5)
You have demand for 2 products: QA = 200 - 4'PA And Qg = 180 – 2°P8 %3D You anticipate seilling 80 units of each product. You have to mark-up your two products to cover an unexpected increase in overhead costs. Based on the cost-plus pricing procedure we did in class, answer this question plus the next question. What is the percentage value of the mark-up you will put on Product A? Be careful; I am NOT asking you the value of "1 Plus the Mark Up", I am asking you the value of the mark up. Multiple Choice 80% 100% 150% 200%
1) Assume that the percentage change of the price of product A is 5% (%Px and the percentage change of quantity demanded is - 10% (%Δqd), Find the following, a) The price elasticity of demand b) Is the demand for this product elastic or inelastic? c) If the price of the product A increases, What happens to total revenue? (increases or decreases) d) if the price increases by 1% by how much quantity demanded will decrease (more than 1%, less than 1%, or by exactly by 1%) 2) Assume that the percentage increase in the price of product X ( %ΔPx) is 4% and the percentage change in quantity demanded in product Y ( %Δqd) is -5%, find the cross price elasticity (Eyx), are product X and Y substitutes or complements? 3) Assume that the percentage increase in income (%ΔI) is 4% and the percentage decrease in the quantity demanded (%Δq) is -6%, find income elasticity (EI), Is this product a normal or inferior product? 4) Is the elasticity for Corn flakes cereal is greater of less…
Suppose that the demand curve for a product is given by = 100 – 2 Px+a Py, = £20 is the price of another product, and where a Py %3D where Px = £20, where = 8. a) Calculate the demand for good X in this market at the current price level. How much revenue would the firm make? b) If the firm wishes to increase total revenue, would it need to increase or decrease the current price of good X? c) Calculate the cross-price point elasticity between goods X and Y at the current price level. Are the goods complements or substitutes? Note: The writing is clear and abbreviations are not allowed.
A 5 percent increase in the price of digital apps reduces the number of tablet devices demanded by 2 percent. The cross price elasticity of demand is (Enter your response rounded to two decimal places and include a minus sign if necessary.) The cross price elasticity of demand indicates that tablet devices and digital apps are complements 3 unrelated goods substitutes Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The following estimates have been obtained for the market demand for cereal In Q= 9.01- 0.68 In P+0.75In A-1.3M, where Q is the quantity of cereal,P is the price of cereal,A is the level of adverstising, and M is income. Based on this information,determine the effect on the consumption of cereal of : a: A 5 percent reduction in the price of cereal. b: A 4 percent increase in income. c: A 20 percent reduction in cereal advertising.
*4* When the price of product "X" is (P1=) $42, Shyanne purchases 20 units of product "X" and when the price of product "X" is (P2=) $38, she purchases 30 units of product "X". Shyanne's "arc" price elasticity of demand for product "X" is (Ex,x =): O" -0.25 " and the demand for "X" is relatively elastic. -4.00 " and the demand for "X" is relatively inelastic. O"-0.25 " and the demand for "X" is relatively inelastic. O " -4.00 " and the demand for "X" is relatively elastic. -0.25 " and "X" is a "normal" good. Save & Continue Continue without saving
Subpart 1-3
Given the demand function QD = 18 − 3P, answer the following ques-tions.(a) Calculate the price elasticity of demand if the price increases fromP1 = 2 to P2 = 5 using the midpoint method.(b) Calculate the point price elasticity of demand at QD = 13.5.(c) At which price/quantity is demand unit elastic?(d) At which price/quantity is demand perfectly elastic and perfectlyinelastic, respectively?