What is the equilibrium price and quantity for natural gas

Reference no: EM132136855

Question: The supply and demand functions for natural gas from 1950 to 2007 are followings.

Qs= 0,02 + 0,7Pg + 0,045Po + 0,06I

Qd= 148,82 -1,8 Pg + 0,069Po + 0,05I

Where Pg is the price of natural gas, Po is the price of crude oil, the average price of oil is about $50 per barrel, and the income is $5000.

(i) What is the equilibrium price and quantity for natural gas, i.e. (Pg*,Qg*)? Explain verbally!

(ii) Calculate the price elasticity, income elasticity and cross price elasticity for the demand of natural gas at the equilibrium, and explain briefly.

(iii) Calculate the price elasticity, income elasticity and cross price elasticity for the supply of natural gas at the equilibrium, and explain briefly.

(iv) Explain the supply and demand functions briefly, e.g. the estimates of variables and their positive/negative signs.

Reference no: EM132136855

Questions Cloud

Describe your service identity and branding : Describe your service’s identity and branding. Identify your target audience and market size.

What is the real value of your savings : Suppose you have $5,000 in savings when the price level index is at 100. What is the real value of your savings if the price level declines by 10 percent?

The reasons for arshad disillusionment : What, according to you, were the reasons for Arshad’s disillusionment? Answer the question using Maslow’s Hierarchy of Needs.

Differences between white hat and grey hat hackers : Explain the main differences between white hat and grey hat hackers. Provide a brief example of a grey hat hacker.

What is the equilibrium price and quantity for natural gas : What is the equilibrium price and quantity for natural gas, i.e. (Pg*,Qg*)? Explain verbally! Calculate the price elasticity, income elasticity and cross price.

Purpose of exclusive gates such as the xor and xnor : What is the purpose of exclusive gates such as the XOR and XNOR? What function do these gates perform?

Find current in the circuit : Use mesh analysis to find current i0 in the circuit. Use mesh analysis to find v0 in the circuit. Solve for i0 in Fig. using mesh analysis

In what way can acid deposition be consider a rival bad : When sulfur dioxide is emitted into the air it is transported over long distances and is converted to sulfuric acid. This gradually falls to the ground.

Discuss why a financial services organization : Discuss why a financial services organization would benefit from using one framework over another (COSO, COBIT,) -- choose a framework or frameworks

User Account

All Pages