1. Suppose my demand for a good is given by P = 6 – 2 * Q and
your demand is given by P = 3 - .5 * Q.
a. Plot your demand curve and my demand curve on the same
graph.
b. Use horizontal summation to derive a formula for our aggregate
demand curve.
c. Add the aggregate demand curve to your graph from part a.
Suppose my demand for a good is given by P = 6 – 2 * Q and your demand is given by P = 3 - 0.5 * Q. a. Plot your demand curve and my demand curve on the same graph. b. Use horizontal summation to derive a formula for our aggregate demand curve. c. Add the aggregate demand curve to your graph from part a.
Suppose that Florian's demand for good “Z” is Qd. Florian = 24 - 3P and Sara's demand is Qo. Sara = 32 - 4P. b) Draw each demand curve on the same graph. (Q on the horizontal axis and P on the vertical axis.) Do not forget to include the value of the intercepts on the vertical and horizontal axes for each curve. Label Florian's demand curve “Florian” and Sara's demand curve “Sara”. c) Derive the market (combined) demand equation...
5. Suppose the demand and supply functions are given by QD 15-P Qs- P-5, where QD and Qs are the quantities and P is the price. a) Graph the demand curve and supply curve. [Hint: label each axis, the price and quantity b) Calculate the equilibrium price and quantity; add these values to the graph and label them as c) Suppose demand decreases by 1 unit at each price. What is the new demand function? Add the d) Calculate the...
2. Demand and supply equations for Good X is given as: Demand: P=6 - (1/50) Q and Supply: P= 1 + (1/100) Q [P: Price, Q: Quantity] i. Given the above information find the equilibrium price and quantity for Good X. ii. What is the point elasticity of demand at equilibrium? Is it elastic, inelastic or unitary elastic? iii. What is the point elasticity of supply at equilibrium? Is it elastic, inelastic or unitary elastic? iv. If the price increases...
Suppose you have 2 consumers in the market with the following demand curves: x1=40-2p and x2= 50-1/2P a) Draw the inverse demand curve for these two consumers, on the same graph, with x on the horizontal and p on the vertical axis. Do this on the left hand side of the space below, leaving yourself room to add a second graph on the right. Numerically mark both y-intercepts and x-intercepts. b) Next to the original graph of the individual demand...
6. Suppose you have a job analyzing a perfectly competitive market. The aggregate demand is 0(p)98 p and the cost function for the firms is Ca)735. Suppose all firms use the same cost function. (a) Setup and solve the profit maximization problem over quantity. Write the quantity an individual firm will produce as a function of the sale price. 3 points) (b) Solve for the price, quantity, and profits for cach individual shop and then also for aggregate quantity in...
3. Imagine there exist three consumers, each with their own demand curves for a Public Good. The equations below provide the demand curves for each consumer for this public good where P is the unit price of the public good and Q is the unit value of the public good. Consumer 1: P = 200 – Q Consumer 2: P= 40 – 30 Consumer 3: P = 50 - Q. The total cost (TC) producing the public good is given...
Question 2 You own and operate a fruit stand. Your demand curve is given by P = 0.5 - 0.002Q, where P is in dollars and Q is in pounds of fruit. Your marginal cost curve is MC = 0.006Q. Your fixed costs equal $10. (a) Use a graph to show your demand and marginal cost curves. (5 marks) (b) Use the demand curve to derive the marginal revenue curve and show it on your graph. (5 marks) (c) Calculate...
1.Suppose that Ben’s demand for fireworks (which for now we assume to be a private good) is QB= 21 − 6P and Jerry’s demand is QJ= 6 − 3P.a.What is the social marginal benefitof firework consumption? That is, what is the willingness of society (society in this problem and in bmeans Ben + Jerry, and this question boils down to horizontal summation of quantities demanded vs vertical summationof prices or willingness to pay)to payfor fireworks? Write down your answer as...
5) (28 points) Suppose the demand and supply for flu shots are given by pd = 1200-Q ps = 440 + Q Suppose flu shots generate a positive externality, and the marginal external benefit (MEB) is MEB=60 -0.050. (a) Derive the marginal social benefit (MSB) curve. (b) Draw the Demand, Supply, and MSB curves on the same graph (with P on the vertical axis and Q on the horizontal axis) and clearly indicate the curves in your graph. (c) Calculate...