to Baseball bats points in total YON CanINI just write hown the mumerical soluti
ID: 1226828 • Letter: T
Question
to Baseball bats points in total YON CanINI just write hown the mumerical solution to prwwem n onve to rwwhe ewlit odr to oain the aN ow are reyuired to show the algebrale steps thot were ke 13. The demand and supply curves for a good are given by O- a Calculate the h Calculate the price atir a sslarc gihven b-30-2 and- equili price? Is supply elastic at the equilíbrium price? (12 points describe briefty how market price will price and quantity. (10 points) ie at e elasticity of demar equilibrium fr demand and supply at the equilibrium price. Is demand el Wi ill market price stay at the same l rce stay at the same level if tirms must pay higher prices for their inp eir inputs in produetion? adjust, (8 points) on fishing hures () and guitar picks () L ures ate prtity nunetion cost $1. Assume that Anthony has $30 to spen O). Lures are priced at s3 while to spend and his ility function can 14 Anthory spends his income guitar picks (G) package of guitar picks be represented as: UVLCi)-41"Gr" a. F Find the optimal consumption level of L and G. 20 points) Nive that tA 3LONG and MUoGa h I Anthoty eter ofi boh ihin lures and guitar picks coxt twviedafn (14o h If Anthony picks) and his income also doubles (income increases to 5o0)? Expl xplain (14 points increasestSoost twice ($614r lures and S2 for guitarExplanation / Answer
13.
a. Qd = 20 - 2P and Qs = P - 1
Equilibrium is attained where Qd = Qs
20 - 2P = P - 1
20 + 1 = 3P
P = 21/3 = 7
Q = 20 - 2(7) = 20 - 14 = 6 units
Therefore, equilibrium price is $ 7 and equilibrium quantity is 6 units.
b. Elasticity of demand shows responsiveness of change in quantity demanded due to change in the price of commodity.
Ed = dQd/dP = - 2
Therefore, Ed is inelastic.
Elasticity of supply shows responsiveness of change in quantity supplied of a commodity due to change in the price.
Es = dQs/dP = 1
Therefore, Es is unit elastic.
c. If firms pay more for their inputs in production then market price will increase as producer spend more on the production of good. Increase in the cost of production increases the market price and decrease in the cost of production decreases the market price of commodity.
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