You are given two sets of points associated with a supply curve: (Q1; P1) = (1; 2) and (Q2; P2) = (4; 3) and two sets of points associated with a demand curve
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Get it written →You are given two sets of points associated with a supply curve: (Q1; P1) = (1; 2) and (Q2; P2) = (4; 3) and two sets of points associated with a demand curve: (Q3; P3) = (2; 5) and (Q4; P4) = (0; 7).
Questions to Answer:
1. Graph the supply and demand curves on the same graph.
2. A. Find the slope of the supply curve.
B. Find the y-intercept of the supply curve.
C. Find the linear equation of the supply curve.
3. A. Find the slope of the demand curve.
B. Find the y-intercept of the demand curve.
C. Find the linear equation of the demand curve.
4. What is the market equilibrium price and quantity?
New Information: Now suppose supply changes, such that the new points on the supply curve are: (Q1a;P1a) = (1; 3) and (Q2a; P2a) = (4; 4).
5. A. Find (and illustrate on your original graph from #1) the new equation of the supply curve. (This means you need to calculate the new slope and new y-intercept for the supply curve).
B. Does this represent an increase or decrease in supply?
C. Assume demand remains the same: what is the new market equilibrium price and quantity?
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