i. Find the equilibrium price and quantity in the market for steel whose supply and demand...

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Economics

i. Find the equilibrium price and quantity in the market forsteel whose supply and demand curves are given by P=4Q^Sand P = 12 â€“ 2Q^D respectively.
ii. If the price charged on the market is $6, how does themarket get back to equilibrium, ceterus parabus.
iii. Wages go up significantly so that the cost of productionincreases. Which of the following would be true in the short run:
The demand curve would shift out or to the right and theequilibrium price would go up
The demand curve would shift back or to the left and theequilibrium price would go down
The supply curve would shift out or to the right and theequilibrium price would go down
The supply curve would shift in or to the left and theequilibrium price would go up
iv. Going back to the original supply and demand curves,suppose a sales tax is imposed on steel consumption. Which of thefollowing would be true in the short run:
The demand curve would shift out or to the right and theequilibrium price would go up
The demand curve would shift back or to the left and theequilibrium price would go down
The supply curve would shift out or to the right and theequilibrium price would go down
The supply curve would shift in or to the left and theequilibrium price would go up

Answer & Explanation Solved by verified expert

3.7 Ratings (378 Votes)

i At equilibrium demand supply Or 12 2Qd 4Qs Or 6Q 12 Or Q 2 At Q 2 from any of demand or supply equation we get P 8 Therefore equilibrium price is 8 and quantity is 2 units ii If the charged price is 6 then it See Answer

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