ECO 10400: Introduction to Quantitative Economics: Spring 2022

Project Instructions and Requirements

Hypothetical Market

A: Instructions

1-There is no specific number of pages for this project since the writing style varies. Just make sure to comprehensively answer the questions and accurately comply to these instructions.

B: Requirements:

1- Createa hypotheticalmarket (make a table showing values for Quantity Supplied, Quantity Demanded and Price).Any values you like and make sense to you! Make at least 10 data points. Keep a constant slope.

2- Label the equilibrium price and quantity in red and createa graph (using excel or any other application you prefer).

3- In the market that you have created assume any possible price floor and any possible price ceiling and find the values of quantity demanded and quantity supplied at each of these prices.

4- Calculate the quantity shortage and quantity surplus resulted from price ceiling and price floor.

5- Show graphically the impact of the price floor and in another graph the impact of the price ceiling.

6- Add a column to the initial table showing the price elasticity of demand at each price level. What is happening to the elasticity (increasing, decreasing, constant)? as price gets lower? Why?According to the current elasticity of demand in this market equilibrium, which decision would be more profitable to the supplier; to raise the price or to lower it? Why?

7- Graph the following functions and write the proper function equation under the graph.

- Upward Concave

- Upward Convex

- Downward Concave

- Downward Convex

• Explain the nature of the relationship between Y and X on the function (Positive or negative) and explain the change in the slope (increasing or decreasing).