The demand and the supply of timber for construction in Australia are given by QD =100 – 20P QS = 5P Suppose there is a strike of loggers, which changes the supply to QS = 4P. Calculate the new equilibrium quantity and use a demand and supply graph to explain how the strike affects the equilibrium price and quantity. After the strike in 2.6, suppose the government subsidizes the buyers s dollars for every unit they purchase. Write the price paid by consumers in the equilibrium as a function of s. Would the government be able to use the subsidy to achieve the surplus before the strike,. If no, explain why. If yes, what should be the value of s?
The demand and the supply of timber for construction in Australia are given by QD =100 – 20P QS = 5P Suppose there is a strike of loggers, which changes the supply to QS = 4P. Calculate the new equilibrium quantity and use a demand and supply graph to explain how the strike affects the equilibrium price and quantity. After the strike in 2.6, suppose the government subsidizes the buyers s dollars for every unit they purchase. Write the price paid by consumers in the equilibrium as a function of s. Would the government be able to use the subsidy to achieve the surplus before the strike,. If no, explain why. If yes, what should be the value of s?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
The
QD =100 – 20P
QS = 5P
Suppose there is a strike of loggers, which changes the supply to
QS = 4P. Calculate the new
the strike affects the
After the strike in 2.6, suppose the government subsidizes the buyers s dollars for every unit they
purchase. Write the price paid by consumers in the equilibrium as a function of s. Would the government
be able to use the subsidy to achieve the surplus before the strike,. If no,
explain why. If yes, what should be the value of s?
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