Answer to Question #288049 in Microeconomics for jjjj

Question

here are 5,000 identical individuals in the market of commodity X, each with a demand function given by Qdx = 6 - P, and 1,000 identical producers of commodity X, each with a function given by Qsx = 10P, where Qdx is an individual's quantity demanded, Qsx is a single producer's quantity supplied, and Px is the price of the commodity.

a. Find the market demand function (QDx) and the market supply function (QSx) for commodity X.

b. Determine the market demand schedule and the market supply schedule of commodity X (for whole dollar prices) and from them find the equilibrium price and the equilibrium quantity.

c. Plot, on one set of axes, the market demand curve and the market supply curve for commodity X and show the equilibrium point.

d. Obtain the equilibrium price and the equilibrium quantity mathematically.

e. Explain why the equilibrium condition is considered stable.

f. Determine the elasticity of demand for commodity X at the equilibrium point.

Answer 1

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