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1. Suppose the demand equation for computers by Teetan Ltd for the year 2017 is given by Qd= 1200-P and the supply equation is given by Qs= 120+3P. Find equilibrium price and analyse what would be the excess demand or supply if price changes to Rs 400 and Rs 120.
2.a. A business firms sells a good at the price of Rs 450.The firm has decided to reduce the price of good to Rs 350.Consequently, the quantity demanded for the good rose from 25,000 units to 35,000 units. Calculate the price elasticity of demand.
2.b. “There is a high cross elasticity of demand between new and old cars”. Discuss the statement by explaining the features of cross elasticity of demand. Also compare and contrast cross elasticity with other types of elasticities of demand.
industries meets or does not meet the criteria?
i) University Education
ii) Wheat Industry
iii) Restaurants
i) Q = 2k + 3L + KL
ii) Q = 20 K0.6 L0.5
iii) Q = 100 + 3K + 2L
iv) Q = 5Ka Lb, Where a+ b = 1
v) Q = K/L
QD = 100 – 5P
QS = 10 + 5P
a) Determine the equilibrium price and quantity.
b) If the government sets a minimum price of $10 per unit, how many units would be supplied and how many would be demanded?
c) If the govt. sets a maximum price of $5 per unit, how many units would be supplied and how many would be demanded?
d) If the demand increases to
Q’D = 200 – 5P
Determine the new equilibrium price and quantity.
Insulation and heating oil
Hot dogs and mustard
Television and videocassette recorder
Rice and potatoes
i) Compute the point price elasticity of demand at P= $30.
ii) If the objective is to increase total revenue, should the price be increased or decreased? Explain.
iii) Compute the arc price elasticity for a price decrease from $30 to $20.
iv) Compute the arc price elasticity for a price decrease from $20 to $15.
i) Q = 2k + 3L + KL
ii) Q = 20 K0.6 L0.5
iii) Q = 100 + 3K + 2L
iv) Q = 5Ka Lb, Where a+ b = 1
v) Q = K/L
TC = 1000 + 2Q + 0.01Q2
To maximize total profit, how many pizzas should be produced each month? In the short run, how much economic profit the business will earn each month?
