KSU Introductory Microeconomics the Price Threshold and Demand Questions
Question Description
Suppose the market for apple cider has the following demand and supply equations:
1
D:P = 30− ·QD (1)
2
S:P = 2+QS. (2)
Use the above equations to answer the following questions.
- What is the Consumer Price Threshold?
- What is the Producer Price Threshold?
- Illustrate the Demand-Supply curve.
- What is the Price Elasticity of Demand ? Is the demand curve generally elastic, inelastic, or unit-elastic?
- What is the equilibrium quantity?
- What is the equilibrium price?
Given that the autumn weather has begun rolling in, the demand for apple
cider has begun to skyrocket. The NEW demand equation is:
1
Dnew:P=45− ·QD. (3)
2
Answer the follower questions.
7. What is the New equilibrium quantity? 8. What is the New equilibrium price?
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