Principles of Economics: Graded Homework Assignment

Principles of Economics: Graded Homework Assignment
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PART 1:
Assume the following information represents the demand and supply curves for good Z.
DemandSupplyPricequantity demandedPriceQuantity supplied$12 60$3 901170495108051009906105810071107110811561209120513010125414011130315012135

Equilibrium price for good Z?
Demand line is P= 18-0.1Q
Supply line is P= -15+0.2Q
Equilibrium price is $ 7
What is the equilibrium quantity bought and sold for good Z?
The equilibrium quantity is 110 units
Would a price of $10 result in a shortage or a surplus? How large?
When price is $ 10 demand is 80 units
When price is $ 10 supply is 125 units
There is a surplus of 45 units
Would a price of $4 result in a shortage or a surplus? How large?
When price is $ 4 demand is 140 units
When price is $ 4 supply is 95 units
There is a shortage of 45 units
e) If the supply for Z increased by 15 units at every price, what would the new equilibrium price and new equilibrium quantity bought and sold be?
New equilibrium price is $ 6
The new equilibrium quantity is 120 units
f) Given the original supply schedule for Z, if the demand of Z were increased by 15 units at every price, what would the new equilibrium price and new equilibrium quantity bought and sold be?
New demand price p=19.5-0.1q
Supply curve p =-15+0.2q
Then 34.5= 0.3q and Equilibrium price= $8
Equilibrium quantity= 115 units
PART 2: equilibrium price and quantity