Find quantity supplied and quantity demanded, Business Economics

Find quantity supplied and quantity demanded:

Suppose there are 300 used cars, with 3 quality levels: bad, medium, and good.  A seller knows the quality of his car but a buyer does not.  The only thing buyers know is that 100 of all used cars are bad, 100 medium, and 100 good.  The values of each type of car to a seller and a buyer are: 

1015_Find quantity supplied and quantity demanded.png

a)  Let P denote the price of a used car.  Find quantity supplied (Q ) and quantity demanded (Qd) of cars if P ≥ 3000. 
b)  Find Qs and Qd if 2000 ≤ P < 3000.
c)  With quantity (Q) on the horizontal axis and price (P) on the vertical, draw the supply curve for cars.  Then draw the demand curve assuming that there is an infinite number of buyers.  Label the curves and key points in your graph clearly.
d)  In equilibrium, what is the price and quantity of cars?  What kind(s) of cars are traded?

Posted Date: 2/13/2013 12:37:51 AM | Location : United States

Related Discussions:- Find quantity supplied and quantity demanded, Assignment Help, Ask Question on Find quantity supplied and quantity demanded, Get Answer, Expert's Help, Find quantity supplied and quantity demanded Discussions

Write discussion on Find quantity supplied and quantity demanded
Your posts are moderated
Related Questions

Problem: (a) Define ‘Business Environment'. (b) Briefly distinguish between internal and external environments of business. (c) Discuss on the key components of the gener

QUESTION (a) Define a public good and discuss how free riding might be a problem in the provision of a public good. (b) What is the rationale for government intervention in

What are the difficulties of Developing Economies? Problems of Developing Economies: • Internal and external difficulties limit LDCs opportunity for development. • Les

The Australian government administers two programs that affect the market for cigarettes. First, media campaigns and labelling requirements aimed at making public aware of the dan

In what conditions might you (1) increase or (2) decrease the amount of supervision specified to a team member? Where a quality problem has been distinguished in an individual’

Equation (1) gives a hypothetical demand curve for hybrid vehicles in the United States during the year 2000, where Q is the quantity demanded and P is the price.  Equation (2) giv