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Suppose the market for copper is represented by: Q = 5P2 - 200 Q = 1,300 - 10P2 a. Find the market equilibrium price and quantity. (2 marks) b. Find the price elasticity of demand at the equilibrium. Show your steps. (3 marks) c. Suppose there is a rise in the supply of copper in the market. Based on your result in (b), explain how the total sales revenue in the copper market will change.

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Sixta Kovacek
Sixta KovacekLv2
31 Mar 2020

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Related questions

Suppose the competitive market for lunch set at local eateries can be represented by:

Demand: Q = 8500 – 2P3 Supply: Q = 500 + 6P3

  1. Find the market equilibrium price and quantity. (2 marks)

  2. Find the price elasticity of demand at equilibrium. Show your steps.

    (3 marks)

  3. Suppose, under the concern of public health, the government suddenly requires many eateries with unsatisfactory ventilation condition to close their business. As a result, the total sales volume of lunch set sold by local eateries changes by 20%.

    1. Based on your answer to (b), find the percentage change in the market price for lunch set. Does the price of lunch set rise or fall? Show your steps.

    2. How would the above government action affect the total revenue of the local eateries industry? Explain briefly.

      (5 marks)

Suppose that the equilibrium price of copper is 5 and the equilibrium quantity of copper is 20. At the market equilibrium, the price elasticity of demand for copper is -0.5, and the price elasticity of supply for copper is 1.0

a) Is the demand for copper elastic or inelastic at the market equilibrium? Explain briefly

b) Assume that the supply and demand curves are linear. Find the equations for supply and demand.

c) Suppose that the quantity of copper supplied at each price falls by 50%. What are the new equilibrium price and quantity?

d) What are the price elasticities of demand and supply at the new equilibrium?

Suppose demand and supply are given by Q^d=14-0.5P and Q^s=0.25P-1.

a)Determine the equilibrium quantity and price in this market. Show the equilibrium graphically.

b)Suppose a $12 excise tax is imposed on the good. Determine new supply and the new equilibrium quantity and price.

c)How much does producers' revenue change?

d)How much tax revenue does the government earn?

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