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 supply and demand equations: Supply equation: QS = 0.5P-20 Demand equation: P = 100 a ) Calculate the equilibrium price and quantity that characterizes this good b) Graphically show the market equilibrium price and quantity you found in part a). Please label this point "A". c) Suppose that the local

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 supply and demand equations: Supply equation: QS = 0.5P-20 Demand equation: P = 100 a ) Calculate the equilibrium price and quantity that characterizes this good b) Graphically show the market equilibrium price and quantity you found in part a). Please label this point "A". c) Suppose that the local

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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 supply and demand equations: Supply
equation: QS = 0.5P-20 Demand equation: P = 100 a
) Calculate the equilibrium price and quantity that
characterizes this good b) Graphically show the market
equilibrium price and quantity you found in part a).
Please label this point "A". 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. d) Graphically show the new market
equilibrium on the graph you drew in part b). Please
label this point "B".

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Step 3: Graphically Show The Market Equilibrium Price and Quantity:

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Step 4: Calculate New Equilibrium Price and Quantity:

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