Question 4 a. The demand for petroleum is given by QD=85 - 0.4P where Q Dis the quantity demanded in thousands of barrels per day and P is the price per barrel in dollars. The supply of petroleum is given by QS=55+0.6P. Calculate the equilibrium price and quantity in this market.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Question 4
a. The demand for petroleum is given by QD=85 - 0.4P where Q Dis the quantity
demanded in thousands of barrels per day and P is the price per barrel in
dollars. The supply of petroleum is given by QS=55+0.6P. Calculate the
equilibrium price and quantity in this market.
b. In the context of the problem in part (a), calculate the demand and supply for
petroleum if the market price is $15 per barrel. What problem exists in the
economy.
c. As more people buy televisions, the demand for Cable services increases and
the price of Cable services decreases. The fall in the price of Cable service
decreases the supply of Cable service." Explain what is wrong with this
statement.
Transcribed Image Text:Question 4 a. The demand for petroleum is given by QD=85 - 0.4P where Q Dis the quantity demanded in thousands of barrels per day and P is the price per barrel in dollars. The supply of petroleum is given by QS=55+0.6P. Calculate the equilibrium price and quantity in this market. b. In the context of the problem in part (a), calculate the demand and supply for petroleum if the market price is $15 per barrel. What problem exists in the economy. c. As more people buy televisions, the demand for Cable services increases and the price of Cable services decreases. The fall in the price of Cable service decreases the supply of Cable service." Explain what is wrong with this statement.
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