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The demand for pocket calculators is given by the function: P = 6 – 0.5Qd; and the supply is given by the function: 6 = Qs - P; where = Qd = quantity demanded, Qs= quantity supplied and P = price. a
The demand for pocket calculators is given by the function: P = 6 – 0.5Qd; and the supply is given by the function: 6 = Qs - P; where = Qd = quantity demanded, Qs= quantity supplied and P = price.
a. What is the equilibrium condition? [1 mark]
b. Solve for the equilibrium price and quantity in this market. [5 marks]
c. Calculate the demand and supply for calculators if the market price is $15 per barrel. What problem exists in the economy? What would you expect to happen to price? [4 marks]
d. Calculate the demand and supply for calculators if the market price is $4 per barrel. What problem exists in the economy? What would you expect to happen to price? [4 marks]
