Question
. Suppose that the demand and supply functions for good X are Qd 5 50 2 8P Qs 5 217.5 1 10P a. What are
. Suppose that the demand and supply functions for good X are Qd 5 50 2 8P Qs 5 217.5 1 10P
a. What are the equilibrium price and quantity?
b. What is the market outcome if price is $2.75? What do you expect to happen? Why?
c. What is the market outcome if price is $4.25? What do you expect to happen? Why?
d. What happens to equilibrium price and quantity if the demand function becomes Qd 5 59 2 8P?
e. What happens to equilibrium price and quantity if the supply function becomes Qs 5 240 1 10P (demand is Qd 5 50 2 8P)?
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Labor Economics
Authors: George J. Borjas
6th edition
73523208, 2900073523209 , 978-0073523200
