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  • Solved by Vu Strength Assignment No.1 ECO401 Solution

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    hk dhaman
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    This document summarizes the solution to an economics assignment with three questions. 1) The equilibrium price for a good is $375 and the equilibrium quantity is 1875 units. This is found by setting the supply and demand curves equal to each other and solving. 2) The demand for the good is price inelastic with an elasticity of -1.4. The supply is unit elastic with an elasticity of 0.2. 3) Government subsidies to producers increase both supply and demand. Subsidies reduce production costs, allowing producers to profit while also lowering prices for consumers. Subsidies were provided for hand sanitizers during the pandemic.

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    401

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    Eco401 1st assignement spring 2020

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    This document summarizes the solution to an economics assignment with three questions. 1) The equilibrium price for a good is $375 and the equilibrium quantity is 1875 units. This is found by setting the supply and demand curves equal to each other and solving. 2) The demand for the good is price inelastic with an elasticity of -1.4. The supply is unit elastic with an elasticity of 0.2. 3) Government subsidies to producers increase both supply and demand. Subsidies reduce production costs, allowing producers to profit while also lowering prices for consumers. Subsidies were provided for hand sanitizers during the pandemic.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    26 views2 pages

    Solved by Vu Strength Assignment No.1 ECO401 Solution

    Uploaded by

    hk dhaman
    This document summarizes the solution to an economics assignment with three questions. 1) The equilibrium price for a good is $375 and the equilibrium quantity is 1875 units. This is found by setting the supply and demand curves equal to each other and solving. 2) The demand for the good is price inelastic with an elasticity of -1.4. The supply is unit elastic with an elasticity of 0.2. 3) Government subsidies to producers increase both supply and demand. Subsidies reduce production costs, allowing producers to profit while also lowering prices for consumers. Subsidies were provided for hand sanitizers during the pandemic.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    Solved by Vu strength

    Assignment no.1
    ECO401
    Solution:
    Qd=4500-7p
    Qs=1500+P
    Q1.
    Qd=Qs
    4500-7p=1500+P
    4500+1500=9+7p
    6000=16P
    P=375
    Put the values in any equation
    Q=4500-7(375) or 1500+375
    Q=1875
    The equilibrium price is 375 and the equilibrium quantity is 1875
    Q2.
    Qd=4500-7p
    Qd/Qp=-7
    The formula of elasticity = (dQ / dP) (P/Q)
    The formula of elasticity =-7*(375/1875)
    The formula of elasticity =-1.4
    Qs=1500+P
    Qs/Qp=1
    The formula of elasticity = (dQ / dP) (P/Q)
    The formula of elasticity =1*(375/1875)
    The formula of elasticity =0.2
    Its absolute value is less than one so it is point inelastic.
    Q3.
    Subsidies for producers increase supply and the quantity demanded by consumers. The
    government provides production subsidies whenever it is in the interest of the public in order to
    meet demand. As the producer increases supply, the cost of production is reduced, allowing the
    supplier to profit from both the subsidy and lower costs. As the result prices also decreases of
    hand sanitizer in domestic market.

    Note: if you found any mistake then correct ur self I am not responsible in case of zero
    marks

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