For the following set of demand and supply, equations do the following, Determine which equation is demand
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Question:
For the following set of demand and supply, equations do the following,
- Determine which equation is demand equation and which one is supply equation. Explain how?
- Find the equilibrium price and equilibrium quantity for each set of equations.
- Draw each set of equations in a clearly labeled graph and show the equilibrium P and Q.
- Impose a $5 on equation set 1 and find new equilibrium quantity, Price sellers receive, and price buyer pay.
- $50 on equation set 2 and find new equilibrium quantity, Price sellers receive, and price buyer pay.
- Draw d and e showing all the points.
- Calculate price elasticity of demand if the price changes from $30 to $32 and between 22 and 20 for equation set 1.
- Calculate price elasticity of demand if the price changes from $2600 to $2800 and between 1600 and 1400 for equation set 2.
Show all your workings
P=50-2Q
P=20+0.5Q Equation set 1
P=5000-0.5Q
P=250+0.5Q Equation set 2
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