Market equilibrium is one of the fundamental concepts in economics. i. Describe market equilibrium using relevant graphs and discuss market surplus and market shortage. (5) ii. Suppose the market for kittens from an adoption centre can be described by the following equations: Demand equation: Qd = 100 – 20P Supply equation: Qs = 130 + 2P Calculate the equilibrium price (P) and quantity (Q) of kittens. Remember that a negative price for kittens is not allowed. How many kittens will be adopted by humans and how many will be “strays?”
Market equilibrium is one of the fundamental concepts in economics. i. Describe market equilibrium using relevant graphs and discuss market surplus and market shortage. (5) ii. Suppose the market for kittens from an adoption centre can be described by the following equations: Demand equation: Qd = 100 – 20P Supply equation: Qs = 130 + 2P Calculate the equilibrium price (P) and quantity (Q) of kittens. Remember that a negative price for kittens is not allowed. How many kittens will be adopted by humans and how many will be “strays?”
Chapter4: Markets In Action
Section: Chapter Questions
Problem 6SQ
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Question
i. Describe market equilibrium using relevant graphs and discuss market surplus and
market shortage.
(5)
ii. Suppose the market for kittens from an adoption centre can be described by the
following equations:
Supply equation: Qs = 130 + 2P
Calculate the
negative price for kittens is not allowed. How many kittens will be adopted by humans
and how many will be “strays?”
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