1. Suppose that other things are constant, Thailand's Department of Commerce (TDC) estimate the models of market demand and supply equations of premier chicken (local) as shown below: Qd=-120p +16000 Qs=80p-4000 (a) Assume that the premier chicken market is in equilibrium, calculate market price and market quantity of premium chicken in Thailand (b) Based on the outcomes in (a), now suppose TDC impose a price floor of 110 Baht per unit on market of the premium chicken. Analyzes the impacts of the policy on the market price and quantity: i.e. the market price goes up or down from what to what and the market quantity goes up or down from what to what, and any shortage or surplus in the market, if any, how much? (c) Given the results in (b), calculate the price elasticity of demand for the premium chicken. Is the demand elastic, inelastic, or else?

1. Suppose that other things are constant, Thailand's Department of Commerce (TDC) estimate the models of market demand and supply equations of premier chicken (local) as shown below: Qd=-120p +16000 Qs=80p-4000 (a) Assume that the premier chicken market is in equilibrium, calculate market price and market quantity of premium chicken in Thailand (b) Based on the outcomes in (a), now suppose TDC impose a price floor of 110 Baht per unit on market of the premium chicken. Analyzes the impacts of the policy on the market price and quantity: i.e. the market price goes up or down from what to what and the market quantity goes up or down from what to what, and any shortage or surplus in the market, if any, how much? (c) Given the results in (b), calculate the price elasticity of demand for the premium chicken. Is the demand elastic, inelastic, or else?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

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