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Supply & Demand - Equilibrium Quantity & Price

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Suppose demand and supply are given by Qd = 50 - P and Qs = 1/2P - 10

a) What are the equilibrium quantity and price in this market?

b) Determine the quantity demanded, the quantity supplied, and the magnitude of surplus if a price floor of $42 is imposed in this market.

c) Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $30 is imposed in this market. Also determine the full economic price paid by consumers.

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Solution Summary

The supply and demand for equilibrium quantity and price. A complete, neat and step-by-step solutions are provided.

Solution Preview

Qd = 50 - P and Qs = 0.5P - 10

(a) Qd = Qs

50 - P = 0.5P - 10

1.5P = 60

P = ...

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