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What is the equilibrium price and quantity of a

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Reference no: EM132066183

Demand for product A is given by:

QD = 500 - 50 P + 10 Y

Where P = Price of A and Y = average income

And the supply of A is given by:

QS = 50 P - 200PB

Where PB = Price of B

If Y = 10 and PB = 2, what is the equilibrium price and quantity of A and how do I solve for the equilibrium price of A as a function of income. 

If Y = 10, what is the equilibrium price of A?

Given that Y = 10 and PB = 2, how do I calculate the price elasticity of demand and the price elasticity of supply.

Suppose the government places a $1/ton specific tax on A.

  1. How do I calculate the new equilibrium price and quantity for the A market.
  2. How much of the tax would get passed on to the consumer?
  3. How can I verify using the calculus approach for solving for the burden of the tax. I really struggle with the calculus parts.

Reference no: EM132066183

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