Suppose you are given the following information: Qs = 100 + 3P Qd = 400 – 2P where Qs is the quantity supplied, Qd is the quantity demanded and P is price. a. From this information compute equilibrium price and quantity. b. Now suppose that a tax is placed on buyers so that Q d = 400 – (2P + T) where T is taxes. If T = 15, solve for the new equilibrium price and quantity. (Note: You are solving for the equilibrium price for sellers and buyers). c. The income elasticity of Abigail’s demand for CDs is 0,75. For Abigail Cds are a normal good or an inferior good? Explain your answer.
Suppose you are given the following information:
Qs = 100 + 3P
Qd = 400 – 2P
where Qs is the quantity supplied,
Qd is the quantity demanded and P is price.
a. From this information compute
b. Now suppose that a tax is placed on buyers so that Q d = 400 – (2P + T) where T is taxes. If T = 15, solve for the new equilibrium price and quantity. (Note: You are solving for the equilibrium price for sellers and buyers).
c. The income
d. Years ago, Ricky paid $500 for CDs to put together a collection. Today, he sold his
CDs for $200. How does this sale affect current GDP?
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