1. Demand for textbooks in a university is given by Qd = 1000-2P, while the supply...

  

Transcribed Image Text:

1. Demand for textbooks in a university is given by Qd = 1000-2P, while the supply function is Qs-400 + 3P. a) b) c) d) e) 58 g) Draw the supply and demand curves. Find the market equilibrium. Assume that photocopying prices (which is a substitute for textbooks) increase dramatically and now demand function becomes Qd = 1200 - 2P. Find the new equilibrium and show it on a graph. Because of increasing costs, supply function becomes QS = -600 + 3P. Find the new equilibrium (while demand function is stillQd=1200 - 2P) To help the financially struggling students, the rectorate gives a subsidy of 80 liras per textbook to students (buyers). Calculate and show the new equilibrium on a graph. Calculate the real subsidy given to the students. Why is the real subsidy given to students not equal to 80? What causes this result? 1. Demand for textbooks in a university is given by Qd = 1000-2P, while the supply function is Qs-400 + 3P. a) b) c) d) e) 58 g) Draw the supply and demand curves. Find the market equilibrium. Assume that photocopying prices (which is a substitute for textbooks) increase dramatically and now demand function becomes Qd = 1200 - 2P. Find the new equilibrium and show it on a graph. Because of increasing costs, supply function becomes QS = -600 + 3P. Find the new equilibrium (while demand function is stillQd=1200 - 2P) To help the financially struggling students, the rectorate gives a subsidy of 80 liras per textbook to students (buyers). Calculate and show the new equilibrium on a graph. Calculate the real subsidy given to the students. Why is the real subsidy given to students not equal to 80? What causes this result?