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Learning Exercise 1 Suppose that we have the following demand and supply functions. QX = 100 - 0.4PX QX = 40 + 0.2PX a. What is the equilibrium

Suppose that we have the following demand and supply functions.
QX = 100 – 0.4PX
QX = 40 + 0.2PX
a. What is the equilibrium market price for product X

Learning Exercise 1 Suppose that we have the following demand and supply functions. Q X = 100 – 0.4P X Q X = 40 + 0.2P X a. What is the equilibrium market price for product X b. b. What is the equilibrium quantity demanded and supplied c. Government imposes a price floor of $120. Analyze the impact of this floor on price, quantity demand and supplied. Would this price floor create a surplus or scarcity of this product in the market? Exercise 2 Suppose you have the following hypothetical demand or sales function. Qx= -4Px+2Py+0.20I+0.04A and PX = $200, (price of good X) PY =$230, (price of good Y) I = $15,000 (disposable per capita income) A =$120,000 (advertizing expenditures) a. Write out a reduced demand function b. Solve for and write out the demand curve equation c. Give a narrative interpretation for the coefficient of I d. How could we classify good X and good Y? Explain why. e. Calculate expected sales. f. Find the total revenue function g Find the marginal revenue function h What output level maximizes total revenue
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Learning Exercise 1
Suppose that we have the following demand and supply functions.
QX = 100 – 0.4PX
QX = 40 + 0.2PX
What is the equilibrium market price for product X
100-.4P = 40+.2P
P= 60/.6 =...

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