Suppose that you are the vice president of operations of a manufacturing firm that sells an industrial lubricant. Further suppose that your economist gives you the following supplv and demand eauations: Supply equation: Qs = 0.5P - 20 Demand equation: P = 100 a) Calculate the equilibrium price and quantity that characterizes this good. Graphically show the market equilibrium price and quantity you found in part a). Please label this point “A". (P on the vertical axis and Q on the horizontal axis). Do not forget to include the value of the intercepts on the vertical and horizontal axes for the demand curve and the vertical intercept for the supply curve. Show ALL b) your work. c) Suppose that the local government imposes a $4 per-unit sales tax on consumers. Calculate the new equilibrium price and quantity that characterizes this good under this new scenario. Graphically show the new market equilibrium on the graph you drew in part b). Please label this point "B". d)

Suppose that you are the vice president of operations of a manufacturing firm that sells an industrial lubricant. Further suppose that your economist gives you the following supplv and demand eauations: Supply equation: Qs = 0.5P - 20 Demand equation: P = 100 a) Calculate the equilibrium price and quantity that characterizes this good. Graphically show the market equilibrium price and quantity you found in part a). Please label this point “A". (P on the vertical axis and Q on the horizontal axis). Do not forget to include the value of the intercepts on the vertical and horizontal axes for the demand curve and the vertical intercept for the supply curve. Show ALL b) your work. c) Suppose that the local government imposes a $4 per-unit sales tax on consumers. Calculate the new equilibrium price and quantity that characterizes this good under this new scenario. Graphically show the new market equilibrium on the graph you drew in part b). Please label this point "B". d)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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