ECONOMICS

The following relations describe the supply and demand for posters.

Qd = 65,000 – 10,000 P
Qs = -35,000 + 15,000P

Where Q is the quantity and P is the price of a poster, in dollars.
a. Complete the following table.

Price Qs Qd Surplus or Shortage
$6.00
5.00
4.00
3.00
2.00
1.00

b. What is the equilibrium price?


Chapter 4 Page 108 Problem 2

The demand function for a cola-type soft drink in general is Q = 20-2P, where Q stands for quantity and P stands for price.

1. Calculate point elasticities at prices of 5 and 9. Is the demand curve elastic or inelastic at these points?
2. Calculate arc elasticity at the interval between P = 5 and P = 6.
3. At which price would a change in price and quantity result in approximately no change in total revenue? Why?


a. Is just a metter of plugging in numbers.
When P = $6, Qd (demand) = 5000 and Qs = 55,000, for a surplus of 50,000.
When P=$4, 4, Qd = 25,000 and Qs = 25,000
etc
b. Clearly the equilibrium price is $4, since that is where Qs=Qd

For problem 2, review the definitions of point and arc elasticites and compute the approprate values.

Revenue is
R = P*Q = 20P - 2P^2.
dR/dP = 0 when 20 - 4P = 0
P = $5 is the price at which small price changes do not affect revenue

  1. 👍 0
  2. 👎 0
  3. 👁 166
asked by Sharma
  1. The Equilibrium price is $4

    1. 👍 0
    2. 👎 0
    posted by Eric

Respond to this Question

First Name

Your Response

Similar Questions

  1. Managerial Economics

    The following relations describe the supply and demand for posters. Qd = 65,000 – 10,000 P Qs = -35,000 + 15,000P Where Q is the quantity and P is the price of a poster, in dollars. a. Complete the following table. Price Qs Qd

    asked by Eric on October 8, 2007
  2. ecomonics

    I am trying to understand the math part of supply and demand . I am not getting it,I really need help! The question is: The demand and supply functions for sweatshirts are as follows: DEMAND Supply Quanity Quanity demanded(per

    asked by elizabeth on November 5, 2008
  3. algebra,help

    I am clueless about this one...can someone help me with it ...thanks Business and finance. The demand equation for a certain type of printer is given by D = -200p + 35,000 The supply equation is predicted to be S= -6p^2 + 400p –

    asked by jas20 on February 20, 2007
  4. Economics

    Annual demand and supply for the Entronics company is given by: QD = 5,000 + 0.5 I + 0.2 A - 100P, and QS = -5000 + 100P where Q is the quantity per year, P is price, I is income per household, and A is advertising expenditure. a.

    asked by Michelle Lawson on July 27, 2011
  5. microeconomics

    1. Market demand is given as QD = 250 – 0.5P. Market supply is given as QS = 2P. In a perfectly competitive equilibrium, what will be the value of consumer surplus? a.$10 000 b.$20 000 c.$40 000 d.$80 000 2. Market demand is

    asked by sarah on February 13, 2013
  6. healthcare fiancare

    HINT: 6% X $1,000,000 – {20% X ($1,000,000 – (6% X $1,000,000))} = 6% X $1,000,000 – {20% X ($1,000,000 - $60,000))}= 6% X $1,000,000 - {20% X $940,000}= 6% X $1,000,000 - $188,000 = $60,000 - $ 188,000= -$128,000 A) The

    asked by patricia on February 12, 2012
  7. statistics

    The data set represents the income levels of the members of a country club. Estimate the probability that a randomly selected member earns at least $98,000. 112,000 126,000 90,000 133,000 94,000 112,000 98,000 82,000 147,000

    asked by HELP on April 18, 2015
  8. math

    The data set represents the income levels of the members of a country club. Estimate the probability that a randomly selected member earns at least $98,000. 112,000 126,000 90,000 133,000 94,000 112,000 98,000 82,000 147,000

    asked by HELP on April 18, 2015
  9. Economics

    Help solving this question, please help me on how to do it. Don't give me the answer... If the banking system has $15,000 of total reserves and a reserve requirement of 20%, the money supply can reach a maximum of $30,000.

    asked by Chris on October 4, 2009
  10. Math

    What is the percent increase in the population for all six inhabited continents from 1950 - 2000? 1950 2000 N.America 221,000,000 305,000,000 S.America 111,000,000 515,000,000 Europe 392,000,000 510,000,000 Africa 229,000,000

    asked by Anonymous on August 28, 2009

More Similar Questions