demand and supply really confused on 3 4 and 5 how do you fi

demand and supply

really confused on 3, 4, and 5. how do you figure out the new supply curve for #5?

Use the following diagram for questions (2) ~ (5) S: p-3/80 D: p- 2000 8Q 0 (2) Find out the equilibrium price and quantity. If the demand doubled (i.e, the quantity demanded doubled at any given price), what are the new equilibrium price and quantity? (3) Consider the original demand and supply curve. What are the new equilibrium price and quantity if supply decreased by half (i.e., the quantity supplied decreased by half at any given price)? (4) (A little challenging) Consider the original demand and supply. If the suppliers are willing and able to sell additional 600 units at any given price, what is the equation for the new supply curve? What are the new equilibrium price and quantity? (5)

Solution

supply curve is P=3/8 Q_S

demand curve is P=2000-1/8 Q_d

2.)at equilibrium,Supply =demand=Q

3/8 Q=2000-1/8Q

Q=4000

P=3/8Q

P=3/8(4000)

P=1500

3.)If demand doubles at any price

Demand curve is P=2000-(1/8)2Q_D

                                 P=2000-1/4Q_D

Supply curve is P=3/8Q_S

at equilibrium ,2000-1/4Q=3/8Q

3/8Q+1/4Q=2000

5Q/8=2000

Q=3200

P=3/8Q=3/8(3200)=1200

4.)quantity supplied decreased by half

P=(3/8)(Q_S/2)

P=3Q_S/16

Demand curve is P=2000-1/8Q_D

Equilibrium:

3/16Q=2000-1/8Q

3/16Q+1/8Q=2000

5/16Q=2000

Q=6400

P=3/16Q

P=(3/16)6400

P=1200

5.)Supply increases by 600

new supply curve is P=(3/8)(Q_S+600)

Demand curve is P=2000-1/8Q_D

at equilibrium

3/8(Q+600)=2000-1/8Q

3/8Q+225=2000-1/8Q

3/8Q+1/8Q=2000-225

4/8Q=1775

Q=3550

P=3/8(Q+600)

P=3/8(3550+600)

P=3/8(4150)=1556