HomeworkLib
Question

A Firm has the following Demand and Supply equations: QD = 10,000 - 500P QS =...

A Firm has the following Demand and Supply equations: QD = 10,000 - 500P QS = -2,000 + 500P a) Calculate equilibrium Price and Quantity b) If government sets P = $15, what is QD and QS?

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Solution :- Equilibrium price is the price at which demand and supply are equal.

Therefore QD = QS

10000 - 500P = -2000 + 500P

1000 P = 12000

P = 12000/1000 = 12

And quantity = 10000 - 500P

At P = 12

10000 - 500(12) = 10000 - 6000 = 4000

Part (ii)

If government sets price P = 15 then

QD = 10000 - 500P = 10000 - 500(15) = 2500

QS = -2000 + 500P = -2000 + 500(15) = 5500

0 0
Add a comment
Know the answer?
Add Answer to:
A Firm has the following Demand and Supply equations: QD = 10,000 - 500P QS =...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Suppose the market demand and market supply curves are given by the equations: Qd= 100-P Qs=...

    Suppose the market demand and market supply curves are given by the equations: Qd= 100-P Qs= 3P a. What are the equilibrium price and equilibrium quantity in the market for this product? b. Find out consumer surplus, producer surplus, and total surplus. c. Suppose the government sets a price floor at $26 for this product. With this price floor, how much is consumer surplus? d. With this price floor of $26, how much is producer surplus? e. Find out total...

  • 5. Suppose the demand and supply functions are given by QD 15-P Qs- P-5, where QD...

    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...

  • The market demand and supply is described by the following equations QD = 250 - 2P QS 3P 1) Find the market equilibrium...

    The market demand and supply is described by the following equations QD = 250 - 2P QS 3P 1) Find the market equilibrium. 2) What is the CS, PS, and W in this market? 3) Assume that the government introduces a equilibrium? price ceiling of p = 15. What is the new 4) Find the change in CS, PS, and W. Is there Dead Weight Loss? if so, of how much? 5) What does this tell you about the welfare...

  • (Please maintain at least 2 decimal places in your answers) QD = 15,000 – 500P QS...

    (Please maintain at least 2 decimal places in your answers) QD = 15,000 – 500P QS = -8,000 + 3,000P Solve for the equilibrium price and quantity. (Hint: at equilibrium, quantity supplied equals quantity demanded.) Now assume the supply function changes to: Qs = -9,000 + 3000P Is this an increase in supply or a decrease in supply? Calculate the new equilibrium price and quantity

  • he demand and supply for a particular commodity are given by the following two equations: Demand:...

    he demand and supply for a particular commodity are given by the following two equations: Demand: P = 10 – 0.2Qd and Supply: P = 2 + 0.2Qs Where Qd and Qs are quantity demanded and quantity supplied, respectively, and P is price. Using the equilibrium condition Qs = Qd, determine equilibrium price and equilibrium quantity. Equilibrium price = $ Equilibrium quantity =  units Graph the two equations to substantiate your answer. Instructions: 1. Use the line tools Qd and Qs...

  • A market is described by the following supply and demand curves: Qs = 3P Qd =...

    A market is described by the following supply and demand curves: Qs = 3P Qd = 400-P The equilibrium price is S and the equilibrium quantity is Suppose the government imposes a price ceiling of $80. This price ceiling is , and the market price will be supplied will be . and the quantity demanded will be . Therefore, a price calling of $60 will result in the quantity the quantity Suppose the government imposes a price floor of $80....

  • The demand and supply conditions of market for beer are given by the following equations: Qd...

    The demand and supply conditions of market for beer are given by the following equations: Qd = 72 - P and Qs = -18 + P a) Find the initial equilibrium price and quantity. b) Calculate the consumer surplus and producer surplus for the equilibrium. c) Suppose that government impose a price floor at P=66 to control the consumption of beer. Is this policy effective? What are price and quantity consumed after this intervention of government? d) Going back to...

  • A market demand and supply functions are as follows: Qd = 500 - P/4, and Qs...

    A market demand and supply functions are as follows: Qd = 500 - P/4, and Qs = P/2 - 100. For parts 2-5, use ONE graph. 1. Determine the equilibrium price and quantity. 2. Graph the inverse demand and supply curves with Q on the horizontal axis and P on the vertical axis. Clearly label all axes, curves, intercepts, and the equilibrium price and quantity values 3.Assume the government sets a rule that the selling price cannot go above $400....

  • Question 6A Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P...

    Question 6A Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P If a quantity tax of $2 per unit sold is imposed, (a) Considering that the government will earn revenue, overall, do you think that society benefits from such a move Yes or no and why? Explain also effect on Buyer Price? Effect on Seller Price? Effects on Quantity traded? Question 6b Given the following information: Demand: Qd = 200 – 5P Supply: Qs =...

  • Question 6A Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P...

    Question 6A Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P If a quantity tax of $2 per unit sold is imposed, (a) Considering that the government will earn revenue, overall, do you think that society benefits from such a move? Explain. Yes or No? Buyer Price? Seller Price? Quantity traded? Question 6b Given the following information: Demand: Qd = 200 – 5P Supply: Qs = 5P If a quantity tax of $2 per unit...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT