Question 2
Subject:EconomicsPrice: Bought3
Question 2. Given the following demand and supply functions of product X (units/day), where P is price per unit measured in dollars. Demand : Qd = 50 – 2P Supply : Qs = 20+4P a. Currently, price = $2, is the market in equilibrium? if not, is there a shortage and surplus and how many units? (0.5 mark) b. Graph the demand and supply. Label the equilibrium price and equilibrium quantity. Determine the equilibrium price and quantity. (0.5 mark) c. Determine the price the buyers pay, the price the sellers receive and quantity sold in 1 the market if a $3 unit tax is imposed on the sellers and incidence of tax.
