Qdx = 3.7 – 0.74Px + 0.0009/ + 0.28P, Eq. 1 %3D Qsx = -119.33 + 69.38Px – 13.88C 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.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

Hello! Please help me answer questions D, E, and F with complete solution and explanation,? Thank you so much!

2. 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 + 0.28P,
Eq. 1
Qsx = -119.33 + 69.38P, – 13.88C
Eq. 2
%3D
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.
A. Derive the market demand function.
B. From (A), what is Px that will make all the buyers stop purchasing this product?
Round-up to two decimals.
C. The consumers will want to consume a maximum of
beyond this amount, they will experience lesser satisfaction.
D. Derive the market supply function.
E. From (D), sellers will not sell anything if Px is equal to
F. What is the equilibrium price in this market? Round-up to six decimals.
G. What is the equilibrium quantity? Use the value of P in (F).
units of this product;
H. Assume the price of product X is P22.72, is there an excess demand or supply? How
much?
I. Assume the price of product X is P26.13, is there an excess demand or supply? How
much?
J. 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.
K. 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?
L. Between the prices P8.50 and P9.50, are the sellers relatively sensitive or
insensitive?
Transcribed Image Text:2. 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 + 0.28P, Eq. 1 Qsx = -119.33 + 69.38P, – 13.88C Eq. 2 %3D 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. A. Derive the market demand function. B. From (A), what is Px that will make all the buyers stop purchasing this product? Round-up to two decimals. C. The consumers will want to consume a maximum of beyond this amount, they will experience lesser satisfaction. D. Derive the market supply function. E. From (D), sellers will not sell anything if Px is equal to F. What is the equilibrium price in this market? Round-up to six decimals. G. What is the equilibrium quantity? Use the value of P in (F). units of this product; H. Assume the price of product X is P22.72, is there an excess demand or supply? How much? I. Assume the price of product X is P26.13, is there an excess demand or supply? How much? J. 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. K. 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? L. Between the prices P8.50 and P9.50, are the sellers relatively sensitive or insensitive?
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education