Suppose that the demand for toy drums is described by the equation Qp = 300 - 5p, and supply is Qs = 60+ 3p, (1) What are the equilibrium price and quantity? (2) If a decrease in consumer income shifted the demand curve to Q=220-5p, how does this change affect the equilibrium price and quantity? Show the solutions using a graph and calculate the numerical answer.
Suppose that the demand for toy drums is described by the equation Qp = 300 - 5p, and supply is Qs = 60+ 3p, (1) What are the equilibrium price and quantity? (2) If a decrease in consumer income shifted the demand curve to Q=220-5p, how does this change affect the equilibrium price and quantity? Show the solutions using a graph and calculate the numerical answer.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:Question 1
Suppose that the demand for toy drums is described by the equation Qp = 300 - 5p, and supply
is Qs = 60+ 3p,
(1) What are the equilibrium price and quantity?
(2) If a decrease in consumer income shifted the demand curve to Q = 220-5p, how does
this change affect the equilibrium price and quantity?
Show the solutions using a graph and calculate the numerical answer.
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