What will be new equilibrium price and quantity compared

Assignment Help Econometrics

Reference no: EM13222971

Assume that demand for a commodity is represented by the equation P = 10 - 0.2 Q d, and supply by the equation P = 2 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condition Qs = Qd ,

1: Solve the equations to determine equilibrium price.

2: Now determine equilibrium quantity.

3: Graph the two equations to substantiate your answers and label these two graphs as D1 and S1.

4: Furthermore; assume the demand for this product increases because of a change in income.

A: graph the new demand curve and label as D 2.

B: What will be the new equilibrium price and quantity compare to the initial one.

C.Is this product normal good or substitute?

Reference no: EM13222971

Questions Cloud

Compute the molarity of s2o32 : Calculate the molarity of S2O32- if 3.0 mL 0.10 M K2S2O8, 2.0 mL 0.10 M K2SO4, 1.0 mL 2% starch, 2.0 mL 0.010 M Na2S2O3, and 5.0 mL 0.20 M KI are mixed.

What is the bang for the buck from each dollar : suppose the government engages in increased purchases of goods and services. For each of the income groups in the accompanying table, what is the value of the multiplier that is, what is the "bang for the buck" from each dollar the government spen..

What can be the incentives for capital investment : In economics, it is agreed that Investment, especially capital investment, leads to economic growth. The source of Investment is from savings. What conclusions can you draw about the incentives for capital investment and economic growth.

Assess wal-marts attempt to restore its public image : Why do you think that Wal-Mart had so many events that caused its image to be tarnished?

What will be new equilibrium price and quantity compared : Assume that demand for a commodity is represented by the equation P = 10 - 0.2 Q d, and supply by the equation P = 2 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condi..

Define what is the temperature of the gas : Consider another expandable balloon is filled with nitrogen gas. The density of the gas is 1.24 g/L and the outside pressure is 1.05 atm. What is the temperature of the gas?

What can the seller do to make cads plan unattractive to kpm : Assume that the marginal cost of a cup of coffee is 10 cents. Assume that the seller can use a two-part tariff coffee purchasing plan (where plan has a price per cup and an entry fee). Concretely, the amount of money that consumer spends on X cups..

Explain compensate for the higher cost of the car : The second car is of European manufacture, costs$21,700, and has a rated mileage of 19km/L. If the cost of gasoline is $1.25/gal and if the cars actually deliver their rated mileage, estimate how many miles you would have to drive for the lowest f..

Explain minimum uncertainty in the position of an electron : What is the minimum uncertainty in the position of an electron, given that we know nothing about its speed except that it is less than the speed of light?

User Account

All Pages