Question 3The equations for demand and supply of a market are given below. Q is quantity, and P is price in the market.Qa= 1000 - 2P%3DQ = 500 + 3P%3DHow much is equilibrium quantity and equilibrium price (show your work)? Remember, atequilibrium the quantity demanded equals the quantity supplied.a.Explain what will happen if there is an effective price control of $50, imposed by the government inthis market. Using this data, please graph the market. Label the vertical P, from 0 to 150 using incre-ments of 50. On the horizontal Q, from 0 to 1000 using increments of 100. Show the new quantitydemanded and quantity supplied in the model. What type of price control is in this question; whatb.does it create in the market?

Answer: Given, Demand function: Qd=1000-2P Supply equation: Qs=500+3P (a). Equilibrium occurs where…

Answered: Question 3 The equations for demand and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Demand, Supply, and Market Equilibrium - Think of a product that you have purchased recently (e.g. soda, diapers, takeout meals, milk, shoes, manicure/pedicure, video game, etc...). Explain how the law of demand affected your purchase. Give specific examples of how the determinants of demand and supply affect this product (T-I-P-E-N and P-R-E-S-T). What happens to the demand curve and the supply curve when any of these determinants change? What would cause a change in demand versus a movement along the same demand curve for this product? How would you determine the new equilibrium price and quantity that result from these changes? Can you demonstrate some of these changes graphically? Price Elasticity of Demand - Consider a product that you have purchased recently. If the price of this item increases, how would you adjust your purchases? Is the Demand for this product Price Elastic or Price Inelastic? Justify your classification by applying the determinants of elasticity to…
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I can seem to figure out the last two questions I bolded: Why does the demand curve slope downward? Why does the supply curve slope upward? Given the demand and supply schedules below: Price (dollars per CD) Quantity Demanded (per day) Quantity Supplied (per day) 5.00 300 100 6.00 250 150 7.00 200 200 8.00 150 250 9.00 100 300 What is the market equilibrium? If the price of CD is $6.00, describe the situation in the CD market. Explain how market equilibrium is restored. A rise in incomes increases the quantity of CDs demanded by 100 a day at each price. What is the new equilibrium and how does the market adjust? A rise in the number of recording studios increases the quantity of CDs supplied by 75 a day at each price. People download more music from the Internet and the quantity demanded of CDs decreases by 25 a day at each price. With no change in incomes, what is the new equilibrium and how does the market adjust?
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