Assume that the demand is represented by the following equation:
$$Q _ { 0 } = 500 + 0.05 \text { income } - 5 P$$ Also assume that the supply is represented by the following equation:
$$Q _ { s } = 5 P - 50$$ (i)Assume that the consumer income is $1,000. Please compute the market equilibrium price and quantity.
(ii)Now, assume that the consumer's income increases to $2,000. What will the new equilibrium values be now?
(iii)Graph the old and the new equilibrium and all the necessary curves.

Question

Assume that the demand is represented by the following equation:
 $$Q _ { 0 } = 500 + 0.05 \text { income } - 5 P$$ Also assume that the supply is represented by the following equation:
 $$Q _ { s } = 5 P - 50$$ (i)Assume that the consumer income is $1,000. Please compute the market equilibrium price and quantity.
(ii)Now, assume that the consumer's income increases to $2,000. What will the new equilibrium values be now?
(iii)Graph the old and the new equilibrium and all the necessary curves.

Quizplus · Accepted Answer

The Answer of Assume that the demand is represented by the following equation:
 $$Q _ { 0 } = 500 + 0.05 \text { income } - 5 P$$ Also assume that the supply is represented by the following equation:
 $$Q _ { s } = 5 P - 50$$ (i)Assume that the consumer income is $1,000. Please compute the market equilibrium price and quantity.
(ii)Now, assume that the consumer's income increases to $2,000. What will the new equilibrium values be now?
(iii)Graph the old and the new equilibrium and all the necessary curves.

Assume That the Demand Is Represented by the Following Equation Q0=500+0.05 income −5PQ _ { 0 } = 500 + 0.05 \text { income } - 5 PQ0​=500+0.05 income −5P

Assume That the Demand Is Represented by the Following Equation $Q _ { 0 } = 500 + 0.05 \text { income } - 5 P$