The demand side of the market for Sprite is comprised of 2 people. These people are William and Owen. P represents the price of 1 gallon of Sprite, and Qd represents the quantity demanded of Sprite in gallons. William's demand for Sprite is modeled by the equation QdW = 10 - 2P Owen's inverse demand for Sprite is modeled by the equation P = 10 - 2QdO (Part I) With this information, draw the market demand graph. Please label the graph for slope values, intercepts, kinks, etc. (Part II) The market supply is modeled by P = Qs. Let's say that the government places a subsidy of $8 (s = 8). As a result, what is the market equilibrium with this intervention of the government (Q**, PD**, and PS**)? (Part III) Please draw the market demand and market supply on a new graph and indicate/label the market equilibrium with the government intervention through a subsidy. Label the graph for slopes, subsidy, equilibrium points, etc.
The
William's demand for Sprite is modeled by the equation QdW = 10 - 2P
Owen's inverse demand for Sprite is modeled by the equation P = 10 - 2QdO
(Part I) With this information, draw the market demand graph. Please label the graph for slope values, intercepts, kinks, etc.
(Part II) The market supply is modeled by P = Qs. Let's say that the government places a subsidy of $8 (s = 8). As a result, what is the
(Part III) Please draw the market demand and market supply on a new graph and indicate/label the market equilibrium with the government intervention through a subsidy. Label the graph for slopes, subsidy, equilibrium points, etc.
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