Use the following supply and demand equations to answer Question 23 below: Q D =
ID: 1133345 • Letter: U
Question
Use the following supply and demand equations to answer Question 23 below:
QD = 120 – P P = 20 + Qs
23. Assuming perfect competition, what is the equilibrium value of the market price?
A. 0 B. 50 C. 66.67 D. 70 E. None of the above
24. The income effect of a price change refers to the impact of a change in
A. demand when income changes.
B. the price of a good on a consumer's purchasing power.
C. income on the price of a good.
D. the quantity demanded when income changes.
25. If smartwatches are considered substitutes for smartphones, the decline in the price of smartphones would, all else equal,
A. decrease the demand for smartwatches
B. increase the quantity of smartwatches demanded.
C. increase the demand for smartwatches.
D. decrease the quantity of smartwatches demanded.
E. None of the above
***PLEASE SHOW ME HOW YOU GOT 23!*****
I know the answer is 70 but how do you set up the equation and so on???
Explanation / Answer
23.
QD = 120 – P
P = 20 + Qs, from this we get Qs=P-20
we know equilibrium value of the market price is when QD=Qs
120-P=P-20
2P=140
P=140/2=70
the above is answer..
24.
B. the price of a good on a consumer's purchasing power
the above is answer..
because higher prices reduces the power to buy more goods or quantity
25.
A. decrease the demand for smartwatches
the above is answer..
as people tend to buy more of smartphone