QUESTION 28 The following relations describe demand and supp

QUESTION 28 The following relations describe demand and supply conditions in the lumber industry. Q is the quantity of lumber, measured in thousands of square feet and P is the price in dollars. Supply: Qs=-15,000 + 50,000P Demand: QD5,00010,000P Find the quantity supplied Will there be shortage or surplus? How much will be the shortage or surplus? and quantity demanded at the price of $1.00. QUESTION 29 The following relations describe demand and supply conditions in the lumber industry. Q is the quantity of lumber, measured in thousands of square feet and P is the price in dollars. Supply:15,000+50,00P Demand: Q75,000 10,000P Find the quantity supplied Will there be shortage or surplus? How much will be the shortage or surplus? and quantity demanded at the price of S0.50.

Solution

Ans 28)

When P=$1 then

Qd=75000-10000(1)=65000

Qs=-15000+50000(1)=35000

Hence Qd>Qs therefore ther will be excess demand because Qd-Qs>0 ...Shortage

And Shortage will be 65000-35000=30000