Problem to handle: A company involved in mining and processing of limestone in the nation has the following supply and demand information at various price levels. 2 4 6 8 Price (USS) 10 12 Demand (Q) Tonnes 18 15 12 9 6 3 Supply (Q.) Tonnes 3 6 9 12 15 18 (a) Derive the equations for demand and supply for the limestone product. (b) Estimate the market equilibrium price and quantity. (c) Explain the price imposition by government in terms of surplus and shortages for an introduced floor price of $9 on the market. (d) By using the demand schedule, produce the total revenue (IR) curve for different quantities of limestone and explain how revenue can be maximized relative to price and quantity variations (e) If demand is increased by 40% given the supply curve, determine the new ● Demand equation Demand schedule by using the new demand equation • Equilibrium price and quantity
Problem to handle: A company involved in mining and processing of limestone in the nation has the following supply and demand information at various price levels. 2 4 6 8 Price (USS) 10 12 Demand (Q) Tonnes 18 15 12 9 6 3 Supply (Q.) Tonnes 3 6 9 12 15 18 (a) Derive the equations for demand and supply for the limestone product. (b) Estimate the market equilibrium price and quantity. (c) Explain the price imposition by government in terms of surplus and shortages for an introduced floor price of $9 on the market. (d) By using the demand schedule, produce the total revenue (IR) curve for different quantities of limestone and explain how revenue can be maximized relative to price and quantity variations (e) If demand is increased by 40% given the supply curve, determine the new ● Demand equation Demand schedule by using the new demand equation • Equilibrium price and quantity
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Problem to handle:
A company involved in mining and processing of limestone in the nation has the following
supply and demand information at various price levels.
--000 ASE
2
6
10
12
Price (USS)
●
●
Demand (Q) Tonnes
18
15
12
9
6
3
Supply (Q.) Tonnes
3
(a) Derive the equations for demand and supply for the limestone product.
(b) Estimate the market equilibrium price and quantity.
(c) Explain the price imposition by government in terms of surplus and shortages for an
introduced floor price of $9 on the market.
(d) By using the demand schedule, produce the total revenue (TR) curve for different
quantities of limestone and explain how revenue can be maximized relative to price and
quantity variations
(e) If demand is increased by 40% given the supply curve, determine the new
Demand equation
• Demand schedule by using the new demand equation
Equilibrium price and quantity
6
9
12
15
18
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Step 1: Defining Market Equilibrium
VIEWStep 2: Derivation of Demand and Supply Equation
VIEWStep 3: Finding the Market Equilibrium
VIEWStep 4: Determination of Surplus or Shortage due to Price Floor
VIEWStep 5: Graphing the TR Curve
VIEWStep 6: Deriving the New Demand Equation and Market Equilibrium
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