The following relations describe the supply and demand for posters.
Q d = 65000- 10000 P
Q d = -3500 + 15000 P
Where Q is the quantity and P is the price of the posters, in dollars.
A. Complete the following table.
Price Qs Qd Surplus or Shortage
B. What is the equilibrium price?
Chapter 4 Page 108 question 3
The for a demand curve has been estimated to be Q- 100 - 10P +.05Y, where Q is quantity, P is price, and Y is income. Assume P = 7 and Y=50.
a. Interpret the equation.
b. At a price, what is income elasticity?
c. At an income level of 50, what is income elasticity?
d. Now assume income is 70. What is the price elasticity at P=8?
Demand and Supply Equations with Equilibrium and Graphing
1. It has often been said that craft unions (electricians, carpenters, etc.) possess considerably greater power to raise wages than do industrial unions (automobile workers, steel workers, etc.). How would you explain this phenomenon in terms of demand elasticity?
2. What would you expect to happen to spending on food at home and spending on food in restaurants during a decline in economic activity? How would income elasticity of demand help explain these changes?
3. Please see attachment for question #3