 ## Market equilibrium - numerical  #### Question 1

For a linear demand function of Qd = 155 - 5P, calculate the values of quantity demanded for prices from \$1 to \$20.

#### Question 2

For a linear supply function of Qs = -25 + 10P, calculate the values of quantity supplied for prices from \$1 to \$20.

#### Question 3

Plot the demand and supply diagram for the values for quantity demanded and supplied calculated in questions 1 and 2.

#### Question 4

Using simultaneous equations calculate the equilibrium price and output. Show your working.

#### Question 5

The demand function changes to Qd = 125 - 5P.

1. Calculate the new values for quantity demanded for prices from \$1-\$20.
2. Calculate the new equilibrium price and output using simultaneous equations
3. Plot the new demand curve as D2 on the demand and supply diagram. Use the diagram to confirm your answers to part (b).

#### Question 6

The supply function now changes to Qs = -15 + 15P.

1. Calculate the new values for quantity supplied for prices from \$1-\$20.
2. Calculate the new equilibrium price and output using simultaneous equations
3. Plot the new supply curve as S2 on the demand and supply diagram. Use the diagram to confirm your answers to part (b).

#### Question 7

Suggest two reasons for:

1. The change in the demand function from Qd = 155 - 5P to Qd = 125 - 5P.
2. The change in the supply function from Qs = -25 + 10P to Qs = -15 + 15P. 