# Chapter 3 Answers - 1 Suppose there are 80 producers and...

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1) Suppose there are 80 producers and 200 consumers. Each producer has the following supply function, Qs = -100 + 24*P. Each consumer has the following demand function, Qd = 156 - 18*P. A. What is the market equilibrium quantity and equilibrium price? Now suppose that 30 of the producers are importers, and 50 of the producers are domestic producers. There are still 200 consumers. Suppose the government enacts a quota equal to 900 goods. B. At what price will the quota be binding? C. What is the new equilibrium quantity and equilibrium price? D. How many goods does each importer sell? 2. Suppose that the demand for inkjet printers has been estimated to be Q = 800 10p + 5p X 3p Z + 0.2Y. Assume that p equals 70, p X is 40, p Z is 120, and Y is 15,000. Note: Y represents per capita income in dollars. Answer each of the following showing your work in each case: a. What is the price elasticity of demand?

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Chapter 3 Answers - 1 Suppose there are 80 producers and...

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