Supply and Demand
Assignment 2
Problem 3.1: QD = 317,500 – 10,000P (Demand) QS = 2,500 + 7,500P (Supply)
Where Q is quantity measured in pounds of scrap aluminum and P is price in cents. Complete the following Price (1) | Quantity supply (2) | Quantity Demand (3) | Surplus (+) or shortage (-)(4) = (2) – (3) | 15¢ | 115,000 | 167,500 | -52,500 (shortage) | 16 | 122,500 | 157,500 | -35,000 (shortage) | 17 | 130,000 | 147,500 | -17,500 (shortage) | 18 | 137,500 | 137,500 | 0 (Equilibrium) | 19 | 145,000 | 127,500 | +17,500 (surplus) | 20 | 152,500 | 117,500 | +35,000 (surplus) |
Problem 3.4: Demand and Supply Curves. A. An increase in the quality of secondary education. B.
Problem 3.6: Demand Curves. Q = 26,000 – 500P – 250POG + 200IB – 5,000S
A. Determine the demand curve facing the airline during the winter month of January if POG= 4 and IB = 250
=> Q = 26,000 – 500P + 250*4 + 200*250 – 5,000S = 75,000 – 500P
=> P = 150 – .002Q
B. During the summer month of July, the variable S = 1 and all other price-related are as specified previously, the firm demand curve is:
=> Q = 26,000 – 500*P – 250*4 + 200*250 – 5000*1 The quantity demanded during July if P = $100
=> Q = 26,000 – 500*100 – 250*4 + 200*250 – 5000*1 = 20,000 Total revenue during the summer month of July is
=> TR = P*Q = 100*20,000 = 2,000,000
Problem 3.9: Supply Curve Determination. MCC = 10 + .004QC (Cornell) MCP = 8 + .008QP (Penn) P = MR A. Determine the supply curve for each firm. Express price as a function of quantity and quantity as a function of price. (Hint: Set P = MR = MC to find each firm’s supply curve.)
+ For Cornell: PC = 10 + .004QC => QC = 250PC - 2500 + For Penn: PP = 8 + .008QC => QP = 125PP - 1000
B. Calculate the quantity supplied by each firm at prices of $8, $10, and $12. What is the minimum price necessary for each individual firm to supply output? + For Cornell:
P = $8 => QC =
Problem 3.1: QD = 317,500 – 10,000P (Demand) QS = 2,500 + 7,500P (Supply)
Where Q is quantity measured in pounds of scrap aluminum and P is price in cents. Complete the following Price (1) | Quantity supply (2) | Quantity Demand (3) | Surplus (+) or shortage (-)(4) = (2) – (3) | 15¢ | 115,000 | 167,500 | -52,500 (shortage) | 16 | 122,500 | 157,500 | -35,000 (shortage) | 17 | 130,000 | 147,500 | -17,500 (shortage) | 18 | 137,500 | 137,500 | 0 (Equilibrium) | 19 | 145,000 | 127,500 | +17,500 (surplus) | 20 | 152,500 | 117,500 | +35,000 (surplus) |
Problem 3.4: Demand and Supply Curves. A. An increase in the quality of secondary education. B.
Problem 3.6: Demand Curves. Q = 26,000 – 500P – 250POG + 200IB – 5,000S
A. Determine the demand curve facing the airline during the winter month of January if POG= 4 and IB = 250
=> Q = 26,000 – 500P + 250*4 + 200*250 – 5,000S = 75,000 – 500P
=> P = 150 – .002Q
B. During the summer month of July, the variable S = 1 and all other price-related are as specified previously, the firm demand curve is:
=> Q = 26,000 – 500*P – 250*4 + 200*250 – 5000*1 The quantity demanded during July if P = $100
=> Q = 26,000 – 500*100 – 250*4 + 200*250 – 5000*1 = 20,000 Total revenue during the summer month of July is
=> TR = P*Q = 100*20,000 = 2,000,000
Problem 3.9: Supply Curve Determination. MCC = 10 + .004QC (Cornell) MCP = 8 + .008QP (Penn) P = MR A. Determine the supply curve for each firm. Express price as a function of quantity and quantity as a function of price. (Hint: Set P = MR = MC to find each firm’s supply curve.)
+ For Cornell: PC = 10 + .004QC => QC = 250PC - 2500 + For Penn: PP = 8 + .008QC => QP = 125PP - 1000
B. Calculate the quantity supplied by each firm at prices of $8, $10, and $12. What is the minimum price necessary for each individual firm to supply output? + For Cornell:
P = $8 => QC =