A firm called Shanghai Housing Limited has won a tender to build housing units within the...

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A firm called Shanghai Housing Limited has won a tender to build housing units within the Durham city council. As part of its initial planning, it found out that the demand and supply functions for houses in Durham are given by the following: Ps= 0 + BQs and Qd = a - Pd a) Represent the above functions on a suitable graph, properly labeling all the axes and curves. [3 marks] b) Find the equilibrium values of quantity and price. [10 marks] c) In order to increase housing units, Durham local council is thinking to offer a subsidy of fk per housing unit. Discuss, using post- subsidy expressions, the possible effects on equilibrium house prices and quantities if this decision is implemented. [10 marks] d) Write expressions for the price elasticities of demand and supply of housing after the granting of the subsidy. [10 marks] e) Write appropriate expression showing the projected total expenditure of Durham county council that is related to the subsidy. A firm called Shanghai Housing Limited has won a tender to build housing units within the Durham city council. As part of its initial planning, it found out that the demand and supply functions for houses in Durham are given by the following: Ps= 0 + BQs and Qd = a - Pd a) Represent the above functions on a suitable graph, properly labeling all the axes and curves. [3 marks] b) Find the equilibrium values of quantity and price. [10 marks] c) In order to increase housing units, Durham local council is thinking to offer a subsidy of fk per housing unit. Discuss, using post- subsidy expressions, the possible effects on equilibrium house prices and quantities if this decision is implemented. [10 marks] d) Write expressions for the price elasticities of demand and supply of housing after the granting of the subsidy. [10 marks] e) Write appropriate expression showing the projected total expenditure of Durham county council that is related to the subsidy.

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a The demand and supply functions of houses in Durham can be represented on a graph as shown below T... View the full answer