Answer to Question #153132 in Microeconomics for christine

Question

We can write the demand and supply curves algebraically as follows:
Demand: Q = a – bP
Supply: Q = c + dP
a) Find the values of the constants a, b, c, and d in the supply and demand equations based
on the supply and demand for the world copper market. The relevant numbers for the
copper market are as follows: Equilibrium Quantity Q∗= 18 million metric tons per year
(mmt/yr) Equilibrium Price P∗ = $3.00 per pound, Elasticity of supply ES = 1.5 Elasticity
of demand ED = -0.5.

Answer 1

$$a-3b=18$$

$$E_D=-b\frac{p}{Q}$$

$$b=3$$

$$a=27$$

$$Q_D=27-3p$$

$$c+3d=18$$

$$E_S=d\frac{3}{18}$$

$$d=9$$

$$c=-9$$

$$Q_S=-9+9p$$