Use a matrix method to find the equilibrium prices and quantities where the supply and demand functions for Good 1, Good 2 and Good 3 are as Qd1 = 50 − 2P1 + 5P2 − 3P3, Qs1 = 8P1 − 5 Qd2 = 22 + 7P1 − 2P2 + 5P3, Qs2 = 12P2 − 5 Qd3 = 17 + P1 + 5P2 − 3P3, Qs3 = 4P3 − 1
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Use a matrix method to find the
Qd1 = 50 − 2P1 + 5P2 − 3P3, Qs1 = 8P1 − 5
Qd2 = 22 + 7P1 − 2P2 + 5P3, Qs2 = 12P2 − 5
Qd3 = 17 + P1 + 5P2 − 3P3, Qs3 = 4P3 − 1
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- For each of the determinants of demand in Equation 2.1, identify an example illustrating the effect on the demand for hybrid gasoline-electric vehicles such as the Toyota Prius. Then do the same for each of the determinants of supply in Equation 2.2. In each instance, would equilibrium market price increase or decrease? Consider substitutes such as plug-in hybrids, the Nissan Leaf and Chevy Volt, and complements such as gasoline and lithium ion laptop computer batteries.Q3Use a matrix method to find the equilibrium prices and quantities where the supply and demand functionsfor Good 1, Good 2 and Good 3 are asQd1 = 50 − 2P1 + 5P2 − 3P3, Qs1 = 8P1 − 5Qd2 = 22 + 7P1 − 2P2 + 5P3, Qs2 = 12P2 − 5Qd3 = 17 + P1 + 5P2 − 3P3, Qs3 = 4P3 − 1If the price per unit of good A is P175 quantity purchased is valued at 5,250 units and quantity supplied equals 2,500 units. If price changes by P1, quantity demanded changes by 4 units for consumer demand and quantity supplied changes by 2 units. Determine the demand and supply functions. Determine the price and quantity at equilibrium, using algebraic solution. Graph demand and supply curves on one set of axes and highlight the following: price-intercepts of demand and supply curves, quantity-intercepts of demand and supply curves, and the equilibrium point. (Make sure to LABEL your graph accordingly.)
- The demand for coffee is given by the following equation, where QD�� stands for the quantity demanded and P stands for price. QD=100−4PQD= 100- 4P The supply of coffee is given by the following equation, where QS�� stands for the quantity supplied and P stands for price. QS=-10+2PQS= -10+ 2P For parts a-d, consider a graph of the demand and supply curves with price on the vertical axis and quantity on the horizontal axis. What is the slope of demand? Slope = At what price is quantity demanded equal to zero (this is, graphically, the vertical intercept of Demand)? P = What is the slope of supply? Slope = At what price is quantity supplied equal to zero (this is, graphically, the vertical intercept of Supply)? P =The table below shows the quantity of gasoline supplied by producers (Qs) and quantity of gasoline demanded by consumers (Qd) given certain price levels (P). 1. . Derive the Qd and Qs functions assuming that both variables are linearly related to price of gasoline. 2. Give the economic meaning of the slope of Qs and Qd functions.Using the supply and demand functions below, derive the demand and supply curves if Y=$55,000 and pc=$9. What is the equilibrium price and quantity of coffee? Part 2 The demand function for coffee is Q=8.5−p+0.01Y, where Q is the quantity of coffee in millions of pounds per year, p is the price of coffee in dollars per pound, and Y is the average annual household income in high-income countries in thousands of dollars. The coffee supply function is Q=9.6+0.5p−0.2pc, where pc is the price of cocoa in dollars per pound.
- Suppose the demand and supply function of the item x and y are associated with each other. If qx and qy are the units produced and sold of x and y, respectively, and px and py are the corresponding prices, the demand functions are qx=7-px+py and qy=24+px-py and the supply functions are qx=-3+4px-2py and qy=-5-2px+4py. What is the equilibrium prices?Given the two functions below in the picture answer the following; a. Using the same Microsoft Excel sheet or otherwise, draw or sketch the two functions for the interval -1<q<3 . b. From your diagram (part a) above), identify which of the two functions represents the demand curve and name the intercept(s) formed. c. From your diagram (part a) above), identify which of the two functions represents the supply curve and name the intercept(s) formed. d. Economically, it is said that equilibrium is established when the demand curve intercepts the supply curve. Hence or otherwise, determine the equilibrium price and quantity.Using the supply and demand functions below, derive the demand and supply curves if Y=$55,000 and pc=$13. What is the equilibrium price and quantity of coffee? Part 2 The demand function for coffee is Q=8.5−p+0.01Y, where Q is the quantity of coffee in millions of pounds per year, p is the price of coffee in dollars per pound, and Y is the average annual household income in high-income countries in thousands of dollars. The coffee supply function is Q=9.6+0.5p−0.2pc, where pc is the price of cocoa in dollars per pound. Part 3 The equilibrium price of coffee is p=$enter your response here per pound and the equilibrium quantity is Q=enter your response here millions of pounds per year. (Enter your responses rounded to two decimal places.)
- Some have argued that higher cigarette prices do not deter smoking. While there are many arguments both for and against this view, some find the following argument to be the most persuasive of all: “The laws of supply and demand indicate that higher prices are ineffective in reducing smoking. In particular, higher cigarette prices will reduce the demand for cigarettes. This reduction in demand will push the equilibrium price back down to its original level. Since the equilibrium price will remain unchanged, smokers will consume the same number of cigarettes.”Do you agree or disagree with this view? Disagree - the reduction in demand will push the equilibrium price below its original level. Disagree - this confuses a change in demand with a change in quantity demanded. Agree - the price increase will ultimately leave cigarette consumption unchanged. Disagree - higher cigarette prices will actually increase the demand for cigarettes.Some have argued that higher cigarette prices do not deter smoking. While there are many arguments both for and against this view, some find the following argument to be the most persuasive of all: “The laws of supply and demand indicate that higher prices are ineffective in reducing smoking. In particular, higher cigarette prices will reduce the demand for cigarettes. This reduction in demand will push the equilibrium price back down to its original level. Since the equilibrium price will remain unchanged, smokers will consume the same number of cigarettes.” Do you agree or disagree with this view?In this exercise, you will analyze the supply-demand equilibrium of a city under some special simplifying assumptions about land use. The assumptions are: (i) all dwellings must contain exactly 1,500 square feet of fl oor space, regardless of location, and (ii) apartment complexes must contain exactly 15,000 square feet of fl oor space per square block of land area. These land-use restrictions, which are imposed by a zoning authority, mean that dwelling sizes and building heights do not vary with distance to the central business district, as in the model from chapter 2. Distance is measured in blocks. Suppose that income per household equals $25,000 per year. It is convenient to measure money amounts in thousands of dollars, so this means that y = 25, where y is income. Next suppose that the commuting cost parameter t equals 0.01. This means that a person living ten blocks from the CBD will spend 0.01 × 10 = 0.1 per year (in other words, $100) getting to work. The consumer ’ s budget…
