Supply & Demand Issues

Problem 22

The demand for a good X is described by the function: Qd=3000-1,5P, and its supply by the function:

Qs=3.5P-500.

To be determined:

1. Price and equilibrium quantity;

2. How will the equilibrium price change after applying a tax in the amount of 200

CU. on each unit sold by the seller;

3. How much of good X will be sold on the market at the new price?

4. What will be the size of the revenues in the budget?

5. Graphic model.

Problem 4

The demand for product A in a market is described by the equation QD=500-P, supply in this market

is described by the equation: QS=-100+2P. The government imposed a tax, paid by the producer, in

size of CU15 for each unit of product sold.

Determine:

1. Price and equilibrium volume until the introduction of the tax;

2. Price and equilibrium volume after introduction of tax;

3. Budget receipts from the tax imposed;

4. Tax burden borne by the seller;

5. Tax burden borne by the consumer;

6. Give graphical representation of the solution to the problem.

Problem 23

The demand for a good X is described by the function: QD=450-2P, and its supply by the function:

QS=3P-300. The producers of the good receive a subsidy of CU50 for each

unit sold.

To be determined:
1. Equilibrium price and equilibrium quantity until the subsidy is granted;

2. Equilibrium price and equilibrium quantity after subsidy;

3. How much money must be allocated from the budget for granting the grant?

4. Graphic model.

Problem 5

The demand for product X in a market is described by the equation QD=200-P, supply in that market

is described by the equation: QS=-40+2P. Government decides to subsidize producer in size

CU10 per unit of product.

Determine:

1. Equilibrium price and volume until subsidisation;

2. Equilibrium price and volume after subsidisation;

3. Expenditure incurred by the budget as a result of the subsidy;

4. Price and equilibrium volume if the government will grant the subsidy to the consumer

5. Give graphical representation of the solution to the problem.

Problem 27

The supply and demand for an import good are described, respectively, by the functions: QD=400-0,5P and

QS=P-200.

In order to protect domestic producers, the Government imposed an import quota in the amount of 150

Properties. Market supply is determined solely by the volume of the imported good.

Determine:

1.Equilibrium price and equilibrium volume until the import quota is established;

2.What influence will the determination of the import quota have on the equilibrium price on the market?

3.How will importers' revenues change as a result of establishing the nominated quota?

4.How the equilibrium price and equilibrium volume will change in that market, if the quota

Will the import be replaced by a duty in the amount of CU15?

5.Present the graphical model of the problem.

Problem 28
On a market, the entire volume of goods sold comes exclusively from imports. Application to

the imported good is described by the function: Qd=1000-35P, the supply on this market is described by

equation: Qs=600+5P. Internal market protectionist measures have led to the imposition of a quota of

import in the amount of 300 units of good.

To be determined:

1. EP and QE, until the import quota is fixed;

2. PE1 and QE1, after the import quota has been fixed;

3. How importers' incomes will change after establishing the nominated quota.

4. Graphic model.