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Question: You are provided the following information:
One of the salespersons in the USA Corp, Yak Butter Division, found out that the demand and supply equations in the yak butter market is
QS = 500 + 30P and QD = 1500 - 20P
a. The salesperson wants to know the equilibrium price and quantity in the yak butter market. SHOW YOUR CALCULATIONS
b. The salesperson just read an article in the Oregonian stating that Oregon is going to set a price of $10 on yak butter. Based on the demand and supply equations for yak butter in part a, the salesperson wants you to calculate the shortage or surplus that the government set price will cause in the yak butter market SHOW YOUR CALCULATIONS.
c. The salesperson also wants to know if $10 is a ceiling or a floor. Explain how you know.
d. Finally, explain to the salesperson the difference between a change in demand and a change in quantity demanded.
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