Suppose demand and supply are given by Q d = 60 - P and Q s = 1.0 P - 10. a. Wha

Question

Suppose demand and supply are given by Qd = 60 - P and Qs  = 1.0P - 10.

a. What are the equilibrium quantity and price in this market?

Equilibrium quantity:

Equilibrium price: $

b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $50 is imposed in this market.

Quantity demanded:

Quantity supplied:

Surplus:

c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $30 is imposed in the market. Also, determine the full economic price paid by consumers.

Quantity demanded:

Quantity supplied:

Shortage:

Full economic price: $

Explanation / Answer

a). at equillibrium supply= demand

so 60-P=P-10

so P= 35

and Q= 25

Equilibrium quantity=25

and Equilibrium price: =35

b).Quantity demanded: =60-50=10

Quantity supplied: =50-10=40

surplus= 40-10=30

c)..Quantity demanded:=60-30=30

Quantity supplied= 50-30=20

shortage 30-20=10

d), full economic price= 35

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