The following are market demand and supply equations for a perfume product: QD = 70 – 4P Qs = 10 + 2P where Pis, Qp and Qs are quantity demanded and supplied of perfume, respectively. A) What is the equilibrium price and quantity? Calculate using the arithmetic method. B) Draw demand and supply curves for prices £0, £4, £6 ... £16. C) Suppose consumers' income increases and perfume is considered as a normal good. As a result, the new demand equation is QD = 100 – 4P. Find the new equilibrium price and quantity of perfume.

The following are market demand and supply equations for a perfume product: QD = 70 – 4P Qs = 10 + 2P where Pis, Qp and Qs are quantity demanded and supplied of perfume, respectively. A) What is the equilibrium price and quantity? Calculate using the arithmetic method. B) Draw demand and supply curves for prices £0, £4, £6 ... £16. C) Suppose consumers' income increases and perfume is considered as a normal good. As a result, the new demand equation is QD = 100 – 4P. Find the new equilibrium price and quantity of perfume.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 7QP

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