Question 2
Assume that each of the markets below is initially in equilibrium. Then for each
market below, suppose that the indicated scenario occurs. Illustrate the effect of each
event in a diagram and indicate the effects on the equilibrium price and quantity.
*Market: Tablets. Scenario: Consumers learn that laptops will be much more
heavily taxed starting with next year’s models
Question 4
A. The supply curve for televisions is given by QS=−4+2P where QS represents
the quantity of televisions supplied and P is the price of televisions. The market
demand for televisions is given by QD=66−3P where QD is the demand for
televisions. Find the equilibrium price and quantity of televisions.
B. Using the equations in part (a), calculate the price elasticity of demand for
televisions when price changes to $20
C.
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