The market supply curve of shoes is given by QS=350,000+10,000P. The demand for shoes can be segmented into two components. The first component is the demand for shoes by local buyers. This demand is given by qA=270,000- 2,500P. The second component is the demand for gloves by foreign buyers. This demand is given by qB=350,000-20,000P. (a) Derive the total market demand function for shoes. Find the equilibrium market price and quantity. a. .., (b) At the equilibrium price, what is the price elasticity of demand?.
The market supply curve of shoes is given by QS=350,000+10,000P. The demand for shoes can be segmented into two components. The first component is the demand for shoes by local buyers. This demand is given by qA=270,000- 2,500P. The second component is the demand for gloves by foreign buyers. This demand is given by qB=350,000-20,000P. (a) Derive the total market demand function for shoes. Find the equilibrium market price and quantity. a. .., (b) At the equilibrium price, what is the price elasticity of demand?.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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
Transcribed Image Text:The market supply curve of shoes is given by
QS=350,000+10,000P. The demand for shoes can
be segmented into two components. The first
component is the demand for shoes by local
buyers. This demand is given by qA=270,000-
2,500P. The second component is the demand for
gloves by foreign buyers. This demand is given by
qB=350,000-20,000P.
(a) Derive the total market demand function for
shoes. Find the equilibrium market price and
quantity. a. ..,
(b) At the equilibrium price, what is the price
elasticity of demand? .
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