Assignment
QUESTION 1: If the demand and supply curve for iPhone 7 are:
D = 100 - 6P, S = 28 + 3P
Where D = Demand; S = Supply and P is the price of an iPhone, what is the quantity of iPhones bought and sold at equilibrium? (5 Marks)
QUESTION 2: Given the following data:
Play Station 4 (PS4) P = 80 - Q (Demand); P = 20 + 2Q (Supply)
Given the above demand and supply equations for PS4, find the equilibrium price and quantity
QUESTION 3:
The weekly demand function for butter in the province of Hubei is Qd = 20000 - 500Px + 25M + 250Py, where Qd is quantity in kilograms purchased per week, P is price per kg in dollars, M is the average annual income of Hubei Province consumer in thousands of RMB, and Py is the price of a kg of margarine. Assume that M = 20, Py = $2, and the weekly supply function is such that the equilibrium price of one kilogram of butter is $14.
Calculate the price elasticity of demand for butter at the equilibrium. What can we say about the demand for butter at this price-point? What significance does this fact hold for suppliers of butter?