Answer to Question #207371 in Macroeconomics for Sam

Question

Sharp Inc. a wholly Ghanaian owned company specializes in the production of hand sanitizers branded as Quin.The company has branched in all the regions in Ghana with its head office located in Cape Coast.It employs 1,200 people and pays an average of GHC550.00 as income tax to the government of Ghana on a monthly basis.Suppose that 7,820 units of Quin are produced and supplied by Sharp Inc. but the quantity demanded for Quin is 8,000 units.Ceteris Paribus,a GHC20.00 change in the price of Quin results in a change in quantity demanded for and supplied of 4 and 5 units respectively.

Given the above information:

a)Determine the equilibrium price and equilibrium quantities of Quin.

b)Suppose the government of Ghana in the wake of the COVID-19 pandemic grants a subsidy of GHC4.50 on each Quin produced.Compute the new equilibrium price and quantities of Quin.

c)Sketch your solution to a) and b) on a graph(graph sheet not needed).

d)Explain your solution to c).

Answer 1

20 and 145

48 and 567

30 and79