Suppose the market demand curve for a product is given by QD=100-5P and the market supply curve is given by QS=5P
a. What are the equilibrium price and quantity?
b. At the market equilibrium, what is the price elasticity of demand?
Suppose government sets the price at $15 to benefit the producers.

1. What is the quantity demanded?
2. What is the quantity supplied?
3. What is the amount of the surplus?

Suppose market demand increases to Qd=200-5P.

1. What is the new equilibrium price?
2. What is the new equilibrium quantity?
3. At this new market equilibrium, what is the own-price elasticity of demand?
4. Has demand become more or less elastic at this new elasticity?

Answer rating: 100% (QA)

Question 1 QD 100 5P QS 5P a At market equilibrium point QD QS Therefore 100 5P 5P 100 5P 5P 100 10P ... View the full answer