Unformatted text preview: by Q d = 10 – P + I , where I is the level of consumers’ income. a) Suppose I = 20 . Graph the supply and demand curves and find the equilibrium point. Find the equilibrium quantity and price using the equations. b) Suppose income rises to 24. Find out the changes in equilibrium price and quantity. 4. Consider a linear demand curve, Q = 120 – 4P. a) What is the price elasticity of demand at P = 20? b) At what price demand is unit elastic (i.e. elasticity = –1)?...
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 Spring '11
 zh
 Market Equilibrium, Supply And Demand, linear demand curve

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