### Quantity increase or decrease depends on demand

##### Reference no: EM135353

Suppose that the demand and supply functions for good X are as follows:

QD = 75 + (.004)*M - 4*P

QS = -43 - (.4)*(PI) + 3*P

a. Is this good a normal good or an inferior good? How do we know?
b. Is the sign correct on the coefficient in front of PI? Explain why or why not?

Assume that M = 50,000 and PI = 80.
c. What is the equilibrium price and equilibrium quantity?
d. If a price of \$40 occurs in the market, rather than the equilibrium price, would we have a surplus or a shortage? Of how many units?
e. If a price of \$60 occurs in the market, rather than the equilibrium price, would we have a surplus or a shortage? Of how many units?
f. If the value of M increased from 50,000 to 60,000 and nothing else changed, would the equilibrium price increase or decrease? By how much? Would the equilibrium quantity increase or decrease? By how much?

### Write a Review

#### Define mercantilism

Define Mercantilism, Pick a country and talk about the products they import and export with the U.S.A. Also talk about the composition of trade with relation of abundance of the two countries

#### A local community voting to raise property taxes

A local community voting to raise property taxes to increase school expenditures

#### Calculate gross national product and net national product

Calculate gross national product and net national product

#### Expected convenience from each restaurant

Calculate whole expected convenience from each restaurant option and also compare?

#### What conclusions can be drawn about market allocations

Use indifference curves to distinguish between income and substitution effects, using the above techniques explain why the demand curve slope downwards, What are the main criteria for designing a tax system, To what extent do you think the national..

#### Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

#### Determine cost to government of buying firms unsold units

Determine the cost to the government of buying firms unsold units

#### What data organization needs in order to make good decision

What data the organization needs in order to make good decisions and how the use of macroeconomic indicators enables organizations to improve their forecasts of the key decision-making data.

#### Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

#### Identify the major participants in the financial system

Analyze the USA financial meltdown that happened in 2008-2009. This crisis was partially caused by the reward systems that were in place for participants in the financial system. Identify the major participants in the financial system.

#### Calculate the price elasticity of demand for newtons donuts

Calculate the price elasticity of demand for Newton's Donuts