This one problem is giving me problems (no pun intended lol) , please help!! 1.

Question

This one problem is giving me problems (no pun intended lol) , please help!! 1. Consider the following weekly supply and demand tables for product X: P Qd Qs 12 0 35 10 5 30 8 10 25 6 15 20 4 20 15 2 25 10 a. Draw the supply and demand curves on the same diagram. Determine the equilibrium price and quantity and demonstrate it in your graph. b. On the same diagram, show the new equilibrium P & Q when demand has increased by 20% and supply has decreased by 20% . Discuss your ansdwer. c. Demonstrate the impact of a government price control set at P = $10. Demonstrate by number and in the graph. Discuss your answer.

Explanation / Answer

P = -2 + .4Qs

P = 12 - .4Qd

eqm qty is

-2 + .4Q = 12 -.4Q

.8Q = 14

Q = 14/.8 = 17.5

eqm price is = 12 -.4*17.5 = 5

b)

the new, eqn is

P = 12 + .2*12 -.4Qd

P = 14.4 - .4Qd

P = -2 -.2*2 + .4Qs

P = -2.4 + .4Qs

new eqm is

14.4 - .4Q = -2.4 + .4Q

16.8 = .8Q

Q = 16.8/.8 = 21

P = 6

when P = 10

qty demanded = 2/.4 = 5

qty supplied = 12/.4 = 30

huge difference

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