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Tute_2 - Introductory microeconomics ECON1001_2010 Tutorial...

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ECON1001 Tutorial 2 1 Introductory microeconomics ECON1001_2010 Tutorial 2 1. The demand and supply functions for a good are given by Demand function: P d = 450 -2Q d Supply function: P s = 100 + 5Q s Where, P is the price in dollars and Q the quantity in units. (a) State and give verbal descriptions of the slopes and intercepts of the demand and supply functions (b) Show that the equilibrium price and quantity are 50 units and $350 respectively. 2.1 Fred’s demand for pasties is given by q 1 = 10 P, where q 1 is the quantity demanded by Fred and P is the price. Kate’s demand for pasties is given by q 2 = 20 2P, where q 2 is the quantity demanded by Kate. Fred and Kate are the only consumers in the market. (a) What is the market demand for pasties? (b) Let supply be given by q s = 2P. What is the market equilibrium? 2.2 Suppose there are 1000 individuals with the following demand function for good X: x i = 1 - 0.001p, and the supply function for each of the 100 firms producing X is x i = 0.01p. Derive the market inverse demand and supply curves and solve for the market
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