Reference no: EM132794911
Industry demand and supply functions for one-bedroom condominiums for senior citizens are as follows:
QD = 3,575,000 - 50,000P + 2,000R + 22,000I +3,000Pop - 100,000i + 7,150A
QS = 1,000,000 + 5,000P - 3,500W - 30,000
- Q is the number of one-bedroom condominiums for senior citizens built per year.
- P is the average price of one-bedroom condominiums in thousands of dollars.
- R is the average rent for a one-bedroom apartment in dollars; estimated to be $1,500.
- I is the average annual income in thousands of dollars; estimated to be $75,000.
- Pop. is population in millions; estimated to be 300 million.
- i is the average interest rate in percent; estimated to be 12 percent.
- A is advertising expenditures in thousands of dollars; estimated to be $500,000.
- W is the average hourly wage rate for skilled labor in dollars; estimated to be $40.
What are the demand and supply curves for one-bedroom condominiums?
Determine if there is a surplus or shortage at P = $150,000.
Determine if there is a surplus or shortage P = $225,000.
Calculate the equilibrium price/output combination.
Does the following event constitute a shift in demand or movement along the demand curve, and in what direction?
Interest rates rise from 12% to 13%.
Does the following event constitute a shift in demand or movement along the demand curve, and in what direction?
Price falls from $200,000 to $175,000.
Does the following event constitute a shift in demand or movement along the demand curve, and in what direction?
Income falls from $75,000 to $70,000.