Problem:
The demand and supply curves for T-shirts in LA, Ca, are given by the following equations:
Q= 24,000 - 500P Q= 6,000 + 1,000P
where P is measured in $ and Q is the number of T-shirts sold per year.
a. Find the equilibrium price and quantity algebraically.
b. If the tourists decide they do not really like T-shirts that much, which of the following might be the new demand curve?
Q=21,000 - 500P Q=27,000 - 500P
Find the equilibrium price and quantity after the shift of the demand curve.
c. If, instead, 2 new stores that sell T-shirts open up in town, which of the following might be the new supply curve?
Q=4,000 + 1,000P Q=9,000 + 1,000P
Find the equilibrium price and quantity after the shift of the supply curve.
In addition,
Assume both b. and c. happen causing both the demand and supply curves to shift. Find the new equilibrium price and quantity after both shifts