question archive The demand equation for resale homes is P = 50 - QDSDS a) Plotb) Find the equilibrium price
The demand equation for resale homes is P = 50 - QDSDS a) Plotb) Find the equilibrium price
Subject:EconomicsPrice: Bought3
The demand equation for resale homes is P = 50 - QDSDS a) Plotb) Find the equilibrium price
. The supply equation for resale homes is P = 20 +0.5Q, where P is the price of a resale home in dollars ('000s), Q is the quantity of resale homes demanded ('000s), and Q is the quantity of resale homes supplied ('000s). The resale homes market is initially in equilibrium, and income is $120,000.
the demand and supply curves for resale homes on the graph sheet provided (4%).
and equilibrium quantity of resale homes from your graph (2%).
c) Calculate consumer surplus and producer surplus for resale home buyers and sellers when the resale housing market is in equilibrium (2%).
d) Calculate the elasticity of demand for resale homes when house price increases from $30,000 to $40,000 (2%). Interpret your results (1%).
e) If a 10% increase in the price of recreational vehicles (RVs) lead to an increase in the quantity demanded for housing from 10,000 to 15,000 units, calculate the cross-price elasticity of demand between houses and RVs (2%). What is the relationship between houses and RVs (1%)?
As a result of an increase in income from $120,000 to $180,000, the demand curve for resale homes is: P = 110 - QD.
f) Use this information to calculate the new equilibrium quantity and price of resale homes (2%).
g) Calculate the income elasticity of demand for resale homes (3%). Interpret your results (1%).
