Regulation & Antitrust Policy (Econ 180)
Signature:
Drake University, Spring 2009
William M. Boal
Printed name:
HOMEWORK EXERCISE #1
"Demand and Supply"
Due January 28, 2009
INSTRUCTIONS: Please enter your answers in the boxes provided. Point values are noted in brackets.
(1) [Demand and supply, simultaneous equations: 28 pts] Suppose demand and supply for flash drives are given by
the following equations.
Demand: P = 14 – (Q/10) Supply: P = 2 + (Q/20)
a. Give the P-intercept of the demand curve.
b. Give the slope ( P/ Q) of the demand curve.
(P/ Q) =
c. Give the P-intercept of the supply curve.
d. Give the slope ( P/ Q) of the supply curve.
(P/ Q) =
e. Solve for the market equilibrium price (P*) and quantity (Q*) for flash drives. Show your work.
f. Compute total revenue for sellers (which equals total spending for buyers).
$
g. Graph the demand and supply curves below. Show your work.
