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Draw the demand and supply curves

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Assume the demand and supply functions for a good are Qd = 200 - 5P + 0.002 INC0 , Qs = -100 + 8P , where INC0 is the exogenously determined average income.

(a) Find the equilibrium price and quantity if the average income is 45,000 dollars.

(b) Draw the demand and supply curves.

(c) Assume average income rises to $50,000. Write and graph the new demand function.

(d) Find the new equilibrium solution. What is the impact of rise in income?

Reference no: EM13877529

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