Suppose that the demand and supply functions for good x are given as follows: 0 = 240- 2P, + 1 – P,and Q =-30+ P, – 2t +s- 2f where P, denotes the price of good x. P, denotes the price of a related%3Dproduct y, I denotes income, t denotes tax firms face, s denotes subsidy and f denotes factor prices.Suppose also that exogenous variables are given as follows: Income (I) 450, Price of the related product(P,)= 30, tax (t)=24, subsidy (s)-15 and factor prices (f)-36.What are the equilībrium price and output values. respectively?100, 240130, 265265, 130240, 100

Demand curve shows the various combinations of willingness to pay of a consumer at different level…

Answered: Suppose that the demand and supply…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the supply and demand curves for a particular product are given by: QS = -20 + 2P QD =100 - 2P where QS and QD are quantities in units and P is the price per unit. (b) Calculate both the demand and supply elasticity around the equilibrium point. [Hint: you can use either the point method or the average arc (midpoint) method.] [5]
Suppose that the demand and supply functions for good x are given as follows: Q-120-2P, +1+P, and Q=-30+P, -2r+s-2/ where P, denotes the price of good x, P, denotes the price of a related product y. I denotes income, t denotes tax firms face, s denotes subsidy and f denotes factor prices. Suppose also that exogenous variables are given as follows: Income (I)-450, Price of the related product (P₂)-30, tax (1)-24, subsidy (s)-15 and factor prices (1)-36. What is the cross price elasticity of demand at the equilibrium? -0.27 and thus products x and y are complements. 0.27 and thus products x and y are substitutes. -0.23 and thus products x and y are complements. 0.23 and thus products x and y are substitutes.
The market for gravel has the following demand and supply relationships: Supply function: Q = 100P - 1,000 Inverse demand function: P = 50 - 0.01*Q + PX, where P represents price of gravel per ton in dollars, Q represents sales of gravel per week in tons, and PX is the price of some other product X in dollars per unit. Let PX = $50/ton In a diagram, qualitatively describe the change that would occur in the market for gravel (i.e. equilibrium price and quantity) if a new discovery has just made the production of product X cheaper. Briefly explain whether it is a movement along or shift of demand curve and supply curve for gravel. In addition to the new discovery regarding product X in previous question), suppose now workers producing gravel ask for sick leave due to COVID. Use supply and demand analysis to predict how these two shocks will affect equilibrium price and sales. Illustrate your results in a diagram. Is there enough information to determine if market prices will rise or…
Suppose the makers of PEZ candies have decided to test market a new dispenser with red, white, and blue candies. The PREZ dispenser (as it will be called in 2024) bearing the likeness of each political party's presidential candy-date is estimated to have a market demand given by: 5Q = 3000 - 200p where p is expressed in dollars per dispenser and Q is expressed in thousands of dispensers sold per week. a. If p= $6 per PREZ dispenser, how many PREZ dispensers will be sold that week? Less than a thousand? b. If p = $6 per PREZ dispenser, what will be the price elasticity of demand? PLEZ show your work. c. If the objective is to maximize revenue, how much would you recommend the company charge per PREZ dispenser?
The estimated demand function for avocados is Q = 160 – 40p, where p is price of avocados. The estimated supply function for avocados is Q = 50 + 15p. Using algebra, determine how price and quantity change when a €0.55 per lb specific tax is imposed on this market.
MATH SOLVER Question Aura Healthy Drinks company private limited concludes that the demand function for its product X is: Qx = 1000 – 0.2 Px + 0.5 Py + 0.04 Y + 0.01 A Qx = Quantity demanded for its product X Px = Price of X Py = Price of Y (a substitute of product X) Y= Consumers income A= Advertisement expenditure of the firm At present price of the product X is Rs. 100. Price of its substitute product Y is Rs. 120. Consumers income is Rs. 10,000 and Advertisement expenditure of the Aura Healthy DrinksCompany Pvt. Ltd. Is Rs. 6000? Questions: 1. What is the current level of demand for the product of Aura Healthy DrinksCompany? 2. Calculate price elasticity for the firm’s product of X? 3. Calculate Advertising elasticity for the firm’s product X? 4. Calculate cross elasticity of demand between its product X and rival’s product Y? If the firm reduces price of X by 20 %, what will be the impact on its demand?
The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 97e° -3p²/2, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a) Determine the price elasticity of demand E when the retail price is set at ¥ 400. E = X Interpret your answer. The demand is going down ✔✔✔ by X% per 1% increase in price at that price level. Thus, large price decrease ✓ (b) At what price will revenue be a maximum? (Round your answer to the nearest integer.) X yen (c) Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.) paint-by-number sets per month is advised.
The demand (D) and supply (S) function for a commodity are P=100 - 20 and P = 10 + Q, respectively. (a) Find the equilibrium price and quantity. That is, find the price and quantity where the D and S functions intersect. (b) A new 10% tax is imposed on this commodity. Find the burden of the tax on demanders and the burden on suppliers. Also find the total taxes. [In order to insure that we all do this problem in the same way, let's assume that the tax is imposed on the supply side of the market. In addition, the burden of the tax on demanders is the difference in price demanders pay when the tax is in existence less the price they paid when there was no tax. The burden on suppliers is the difference in price suppliers received when there was no tax and the net price (after remitting tax to the government) they receive when the tax is in existence.]
Paper cups are popular items for schools and are produced in the market. There are equations for the Supply and Inverse Demand of paper cups that model its Supply and Demand graph. These equations are (for supply), P = 2 + 3Qs, and (for Inverse Demand), P = 12 - 2Qd. Likewise, paper cups are inexpensive and not very helpful for companies trying to achieve high profits. As a result, the government placed a price support of $9. (Part I) Draw the market equilibrium with the government intervention (Q**, P**) of the price ceiling. Please label the graph for slopes, equilibrium points, price support, etc. (Part II) What is the market equilibrium with the intervention of the government (Q**, P**)? (Part III) What is the government surplus (GS**)? (Part IV) What is the Dead Weight Loss (DWL**)?
The quantity demanded x each month of Russo Espresso Makers is 250 when the unit price p is $150; the quantity demanded each month is 1000 when the unit price is $120. The suppliers will market 750 espresso makers if the unit price is $50. At a unit price of $80, they are willing to market 3000 units. Both the demand and supply equations are known to be linear. (a) Find the demand equation.p = (b) Find the supply equation.p = (c) Find the equilibrium quantity and the equilibrium price. equilibrium quantity units equilibrium price $
Suppose that a certain product has the following demand and supply functions. Demand: Supply: p = -0.049 + 45 0.049 + 20 p = A $5 tax per item is levied. Determine the supply function when tax is added. p = Find the market equilibrium point after the tax. C (q, p) = =
Using the data in the table below, estimate the demand function for cod. Price, dollars per pound 1.90 1.35 1.25 1.20 0.95 0.85 0.73 Using the Excel trendline option to estimate a linear demand function, the linear demand function is Q = 12.53-6.25p. Suppose the quantity in the first row of the table were 2 instead of 1.5. The linear demand function would now be Suppose the quantity in the second row of the table were 3.2 instead of 2.2. The linear demand function would now be Quantity, thousand pounds per day 1.5 Q= - SNES67 524 5 Q= -p. (Enter your responses rounded to two decimal places.) 2.2 4.4 5.9 6.5 7.0 8.8 p. (Enter your responses rounded to two decimal places.)

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