supply and demand functions:
consider the following supply and demand functions: ???????? =−2????+20
???????? =2????−4
Suppose at each price individuals now demand four more units of output because of stronger preferences. Compute the equilibrium price and quantity given this change.
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2. (8 points) Tom and Harry constitute the entire market for orange juice. They face identical demand curves. Tom’s demand curve is given by
Harry’s demand curve is given by
???? = 6 − ????1 2
???? = 6 − ????2 2
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(a)Â Obtain the total market demand function for orange juice.
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(b)Â Find the price and market quantity demanded that maximize total revenue R. What is the maximum R? (Hint: construct a table and use the following values for P: 0,1,2,3,4,5, and 6)
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(c)Â Compute the point elasticity of demand when price is 4. If price decreases 1%, what happens to quantity demanded?
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(d)Â If equilibrium price is equal to 4, compute the consumer surplus.Â
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Posted 12 Jul 2017 01:07 AM
My Price 7.00
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