Assignment 2: Demand & Supply Analysis of Fridges | Microeconomics | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

EXERCISE 1
1) - The demand equation: P = a - b.Qd
+) b = ΔP/ ΔQd = 20/100 = 0.2
+) According to the table: 100 = a - 0.2.1000 → a = 300
=> The demand equation of fridge: P = 300 - 0,2.Qd
- The supply equation: P = c + d.Qs +) d = ∆p/∆Qs= 0.2
+) According to the table: 100 = c + 0.2.300 →c = 40
=> The supply equation of fridge: P= 40 + 0.2Qs
- Equilibrium price for fridge is when Qs=Qd
→ (P−40)/0.2 = (300 − P)/0,2 →P = 170
→ Equilibrium price for fridge is: 170
- Equilibrium quantity for fridge: 300 - 0,2.Qd = 40 + 0.2Qs => Qd = Qs = 650 2)
- At the price of 200: the quantity of demand is 500 and the quantity of
supply is 800 → at the price of 200 there is 300 surplus
- At the price of 110: the quantity of demand is 950 and the quantity of
supply is 350 → at the price of 110 there is 600 shortage 3)
- If price of electricity increase, the demand for fridge will decrease.
- At each level of price the quantity demand for fridge is change 300 units.
- The equation of demand for fridge is P’= a-b.Qd
=> a= 0.2→ 100 = a-0.2 .700 → a= 240
=> The new equilibrium price:(240− P)/0.2=( P−40)/0.2 → P= 140
→the new equilibrium quantiy is Q = 500 4)
- Suppose government imposes a tax of $ 10 per one units of fridgesold,
what are new equilibrium price and new equilibrium quantity for fridge?
+) The new Ps = P+ 10Ps= 50+0.2Qs
The new equilibrium price is (P−50)/0,2=(300− P)/0,2 →P= 175
The new equilibrium quantity is Q= 625 5) The new Ps is P-10 +) Ps= 30+0,2Qs
+) The new equilibrium price is( P−30)/0,2=(300− P)/0,2 →P= 165
=> The new equilibrium quantity is Q= 675 EXERCISE 2: 1) - Effect on Demand:
An increase in personal income tax reduces disposable income, leading to a
decrease in consumers' ability to purchase goods like motorcycles. This would
decrease demand for motorcycles, causing the demand curve to shift leftward. - Impact on Equilibrium:
• Equilibrium Price (P): Decreases
• Equilibrium Quantity (Q): Decreases 2) - Effect on Supply:
Motorcycle production heavily relies on steel. An increase in the price of steel
raises production costs, making it more expensive for producers to supply
motorcycles. This would decrease supply, shifting the supply curve leftward. - Impact on Equilibrium:
+) Equilibrium Price (P): Increases
+) Equilibrium Quantity (Q): Decreases 3)