Respuesta :
Answer:
Explanation:
1 .
Qe = 680 - 9P + 0.006M - 4PR
When the price of good R is increased , the demand of good is decreased . That means the demand of another good is increased . It means that goods R is a complement good . Now the coefficient of M is positive that means when income increases , demand of good increases . So the good is a normal good .
Hence good is a normal and complement good of R
option e ) is correct.
2 .
Qe = 680 - 9P + 0.006M - 4PR
Putting the value of M = 15000 and PR = 20
Qe = 680 - 9P + 0.006x 15000 - 4 x 20
Qe = 680 - 9P + 90 - 80 = 690 - 9P
3 .
For equilibrium
supply = demand
30+3P = 690 - 9P
12 P = 660
P = 55
Q = 690 - 9P = 690 - 9 x 55 = 195
4 .
When the price of goods is 60 , it is higher than the equilibrium price , hence demand will shrink and it will be less than supply
quantity demanded = 690 - 9P = 690 - 9 x 60 = 150
quantity supplied = 30+3P = 30 + 3 x 60 = 210
excess supply = 210 - 150 = 60 .
5 .
when price is 40 which is less than equilibrium price
there will be more demand
quantity demanded
= 690 - 9P = 690 - 9 x 40 = 330
quantity supplied = 30+3P = 30 + 3 x 40 = 150
excess supply = 180
1. The good is both a normal as well as a complement for good R.
2. The demand function would be Qd = 690 - 9P.
3. The P is $55 and Q is 195 units.
4. There is a supply surplus of 60 units of the goods.
5. There is a shortage of 180 units of goods due to excess demand.
The good referred to as normal good as M is given positive, which means income increases the quantity of demand would also rise. On the other hand, the good is complementary to R due to the negative relationship that is the price of R increases would create an increase in demand of another good.
The function is given as:
[tex]Qe = 680 - 9P + 0.006M - 4PR[/tex]
Now, by substituting the value of M that is 15000 and PR that is 20 in the above function, it would give:
[tex]Qe = 680 - 9P + 0.006x 15000 - 4*20\\Qe=690 - 9P[/tex]
The equilibrium level is decided when demand equalizes with the supply.
Price at equilibrium would be computed as:
[tex]30+3P = 690 - 9P\\=55[/tex]
Now, equilibrium quantity would be:
[tex]Q = 690 - 9P \\ = 195[/tex]
The excess or surplus of supply would be seen when the price becomes 60. it is because this price would be more than the equilibrium price that is 55, which would decrease the quantity demanded. Thus, it shows that supply in the market is the same but demand falls with increased prices.
Quantity demanded would be:
[tex]Qd = 690 - 9*60 \\ = 150[/tex]
Quantity supplied would be:
[tex]Qs= 30 + 3* 60 \\= 210[/tex]
Finally, the excess supply is:
[tex]Qs-Qd\\=210 - 150 \\= 60[/tex]
When prices fall that is 40 below the equilibrium prices then it would increase the quantity demanded with the same supply in the market.
Calculation of Quantity demanded:
[tex]Qd= 690 - 9 * 40\\ = 330[/tex]
Quantity supplied is computed as:
[tex]Qs = 30 + 3* 40 \\= 150[/tex]
Now the excess of demand would be:
[tex]Qd-Qs\\330-150\\=180[/tex]
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