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Supply and Deman Questions
Supply and Deman Questions
Qd=3,000 -(minus)10 P
Qs=1,000+ 10P
where Q is the number of businesses that need services and P is the monthly fee, in
dollars.
$300
Qs = 1,000 + 10p
0 = 1,000 + 10p
10p = -1,000
p = -$100
Quantity = 2,000
No effect on Supply.
Qd = 3,500 – 10p
Qs = 1,000 + 10p
At Equilibrium:
2,500 = 20p
P = $125
Qd = 3,500 – 10(125)
= 3,500 – 1,250
= 2,250
f)Suppose new suppliers enter the market due to the increase in demand so the new
supply curve is Q= -(minus)500 + 10P. What are the new equilibrium price and
equilibrium quantity?
Qs = -500 + 10p
QD = 3,500 – 10p
4,000 = 20p
P = $200
Q = -500 + 10($200)
= -500 + 2,000
= 1,500