Originally, the quantity demanded and the quantity supplied for the commodity Z are 50 units and 80 units respectively when the selling price is 20 pesos per unit; 95 units and 60 units respectively when the selling price is 15.00 pesos per unit. Solve the following: 1. Derive the original and new demand and supply equations given that due to the increase in the buyer's income, the demand for this commodity increased by 10 units. 2. Solve for the price that caused a surplus of 5 units. Solve for the price that caused a shortage of 12 units. 3. Prove that the price equilibrium and the change in demand is directly related by computing the change in price equilibrium. Also prove that the quantity equilibrium and the change in demand are also directly related by computing the change in quantity equilibrium.

Originally, the quantity demanded and the quantity supplied for the commodity Z are 50 units and 80 units respectively when the selling price is 20 pesos per unit; 95 units and 60 units respectively when the selling price is 15.00 pesos per unit. Solve the following: 1. Derive the original and new demand and supply equations given that due to the increase in the buyer's income, the demand for this commodity increased by 10 units. 2. Solve for the price that caused a surplus of 5 units. Solve for the price that caused a shortage of 12 units. 3. Prove that the price equilibrium and the change in demand is directly related by computing the change in price equilibrium. Also prove that the quantity equilibrium and the change in demand are also directly related by computing the change in quantity equilibrium.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

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