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Economics
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(Market Equilibrium).

Aggregate market supply and demand for good X are the following:

Q_d (P)=1040-15P

Q_s (P)=25P           

a. (6 points) Calculate the equilibrium price and quantity

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Related questions

Consider the supply and demand for cell phones. The market demand for cars is given by Q_D = 7000-30P and supply is given by Q_S = 1000

a) Find the equilibrium price and quantity.

Suppose that consumers change their expectations and believe their future income will be lower. This causes the demand curve to shift to Q_D=6500-30P

b) If prices are sticky, does this shock lead to a surplus or a shortage? By how much?

c) If prices are flexible, does this shock lead to inflation or deflation? By how much?

Consider the supply and demand for cell phones. The market demand for cars is given by Q_D = 7000-30P and supply is given by Q_S = 1000

a) Find the equilibrium price and quantity.

Suppose that consumers change their expectations and believe their future income will be lower. This causes the demand curve to shift to Q_D=6500-30P

b) If prices are sticky, does this shock lead to a surplus or a shortage? By how much?

c) If prices are flexible, does this shock lead to inflation or deflation? By how much?

Suppose we have the following equations: Demand Curve: Q_D^X=-1,450-25P_X+12.5P_Y+.2Inc

Supply Curve: Q_S^X=-100+75P_X-25P_Y-12.5P_Z+10R

Where Q = quantity

Px = price of our good X

Inc = income = $8,000

R = rainfall = 20

PY = price of product Y = $5

PZ = price of product Z = $8

a) Calculate equilibrium price and quantity.

b) Is Good X a normal good or inferior good? Use elasticities to answer this, and explain.

c) Are Goods Y and Z substitutes or complements to our good X? Use elasticities to answer this, and explain. It is easiest to use simple calculus to calculate elasticities.

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