In Example 2.8, we discussed the recent increase in world demand for copper, due in part to China's rising consumption. Recall that the demand equation is Q=27-3P, the supply equation is Q= -9+9P, the initial equilibrium price is P* = $3.00 (dollars per pound), and the initial equilibrium quantity is Q* = 18 (million metric tons per year). 1. Using the given demand and supply equations, calculate the effect of a 20-percent decrease in copper demand on the price of copper. Note: use the initial equilibrium values for P* (= $3.00) and Q* (= 18 million metric tons) when calculating the changes below. As a result of this change in demand, the price of copper will (Enter your response rounded to two decimal places.) by $ (Enter your response rounded to two decimal places.) and the equilibrium quantity will by million metric tons per year. 2. Now suppose as well that the U.S. production of copper declined between 2000 and 2003. Calculate the effect of both a 20-percent decrease in copper demand (as you did above) and a 15-percent decline in copper supply. As a result of both of these changes, the equilibrium price of copper will metric tons per year. (Enter your response rounded to two decimal places.) by $ (Enter your response rounded to two decimal places.) and the equilibrium quantity of copper will by million
In Example 2.8, we discussed the recent increase in world demand for copper, due in part to China's rising consumption. Recall that the demand equation is Q=27-3P, the supply equation is Q= -9+9P, the initial equilibrium price is P* = $3.00 (dollars per pound), and the initial equilibrium quantity is Q* = 18 (million metric tons per year). 1. Using the given demand and supply equations, calculate the effect of a 20-percent decrease in copper demand on the price of copper. Note: use the initial equilibrium values for P* (= $3.00) and Q* (= 18 million metric tons) when calculating the changes below. As a result of this change in demand, the price of copper will (Enter your response rounded to two decimal places.) by $ (Enter your response rounded to two decimal places.) and the equilibrium quantity will by million metric tons per year. 2. Now suppose as well that the U.S. production of copper declined between 2000 and 2003. Calculate the effect of both a 20-percent decrease in copper demand (as you did above) and a 15-percent decline in copper supply. As a result of both of these changes, the equilibrium price of copper will metric tons per year. (Enter your response rounded to two decimal places.) by $ (Enter your response rounded to two decimal places.) and the equilibrium quantity of copper will by million
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:In Example 2.8, we discussed the recent increase in world demand for copper, due in part to China's rising consumption.
Recall that the demand equation is Q = 27 - 3P, the supply equation is Q = −9+9P, the initial equilibrium price is P* = $3.00 (dollars per pound), and the initial equilibrium quantity is Q* = 18 (million metric tons per
year).
1. Using the given demand and supply equations, calculate the effect of a 20-percent decrease in copper demand on the price of copper. Note: use the initial equilibrium values for P* (= $3.00) and Q* (= 18 million
metric tons) when calculating the changes below.
As a result of this change in demand, the price of copper will
(Enter your response rounded to two decimal places.)
by $
(Enter your response rounded to two decimal places.) and the equilibrium quantity will
As a result of both of these changes, the equilibrium price of copper will
metric tons per year. (Enter your response rounded to two decimal places.)
by
million metric tons per year.
2. Now suppose as well that the U.S. production of copper declined between 2000 and 2003. Calculate the effect of both a 20-percent decrease in copper demand (as you did above) and a 15-percent decline in
copper supply.
by $ (Enter your response rounded to two decimal places.) and the equilibrium quantity of copper will
by
million
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