Assume a demand equation:Qd = 9 - 0.1p - Pc + 0.01ps+ 0.0001Yand a supply equation:Qe = 0.1p - 0.02p; + 0.01N + 0.01T - 0.1wwherep = price of the goodP. = price of a complement = $3Q = quantity in thousands of unitsP; = price of an input = $450Ps= price of a substitute = $200N = number of firms = 700T= index of technology = 300w = wage rate = $10Y = consumer income = $20,000If the price is $55, there will be anofthousand units.

supply and demand, refers to the relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy. here we calculate the given as follow;GIVEN Demand equation=Qd = 9 - 0.1p - pc + 0.01ps + 0.0001Y supply equation=Qs = 0.1p - 0.02pi + 0.01N + 0.01T - 0.1w p= price of good Pc= price of complement=$3 Ps= price of substitute=$200 y=consumer income=$20000 q=quantity in thousands units Pi= price of input=$450 N=no of firms=700 T=index of technology=300 Calculate quantity demanded at $55 per unit - Qd = 9 - 0.1p - pc + 0.01ps + 0.0001Y Qd = 9 - (0.1x 55) - 3 + (0.01x 200) + (0.0001 x 20,000) Qd = 9 - 5.5 - 3 + 2 + 2 Qd = 4.5 thousand units Calculate quantity supplied at price of $55 per unit - Qs = 0.1p - 0.02pi + 0.01N + 0.01T - 0.1w Qs = (0.1x 55) - (0.02x 450) + (0.01x 700) + (0.01x 300) - (0.1x 10) Qs = 5.5 - 9 + 7 + 3 - 1 Qs = 5.5 thousand units Quantity supplied is greater than the quantity demanded. So, there is surplus at price of $55 per unit. Surplus = Qs - Qd Surplus = 5.5 thousand units - 4.5 thousand units Surplus = 1 thousand units So, If the price is $55, there will be an surplus of 1 thousand units.

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Economics

Pc 0.01Ps and a supply equation: Qs = 0.1p - 0.02p; + 0.01N + 0.01T - 0.1w where p = price of the good Pc = price of a complement = $3 Ps= price of a substitute = $200 Y = consumer income = $20,000 Q = quantity in thousands of units P, = price of an input = $450 N = number of firms = 700 T= index of technology = 300 w = wage rate = $10 If the price is $55, there will be an of thousand units.

Pc 0.01Ps and a supply equation: Qs = 0.1p - 0.02p; + 0.01N + 0.01T - 0.1w where p = price of the good Pc = price of a complement = $3 Ps= price of a substitute = $200 Y = consumer income = $20,000 Q = quantity in thousands of units P, = price of an input = $450 N = number of firms = 700 T= index of technology = 300 w = wage rate = $10 If the price is $55, there will be an of thousand units.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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