(i) (ii) (iii) The market for good X is given as: XD = 1000-2P X =...

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(i) (ii) (iii) The market for good X is given as: XD = 1000-2P X³ = P-200 Sketch the market and solve for the market equilibrium. The government purchases 30 units of X annually as an input to a project it is undertaking. Discuss whether the government's budgetary expenditure on X is an accurate measure of the annual cost of the input used in the project. Use your graph and the market information above to help explain your reasoning. Suppose the project runs for 5 years. Input costs are incurred in years 1 to 5. Assuming a discount rate of 4%, calculated the present value of inputs costs for the project. Are you using an accurate measure or an over- or under-estimate and how does your choice affect the net present value of the project (i.e. is it an accurate NPV or will NPV be over-or under estimated)? (i) (ii) (iii) The market for good X is given as: XD = 1000-2P X³ = P-200 Sketch the market and solve for the market equilibrium. The government purchases 30 units of X annually as an input to a project it is undertaking. Discuss whether the government's budgetary expenditure on X is an accurate measure of the annual cost of the input used in the project. Use your graph and the market information above to help explain your reasoning. Suppose the project runs for 5 years. Input costs are incurred in years 1 to 5. Assuming a discount rate of 4%, calculated the present value of inputs costs for the project. Are you using an accurate measure or an over- or under-estimate and how does your choice affect the net present value of the project (i.e. is it an accurate NPV or will NPV be over-or under estimated)?

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i To sketch the market we need to plot the supply and demand curves The demand curve is given by Xp 10002P where P is the price of X and the supply cu... View the full answer