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Demand and Supply problems Solving

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By SUNKESULA

 Here are 10 problems with answers on Demand and Supply:

  • *Problem 1:*

  • A company produces widgets at a cost of $10 per unit. If the market demand is 1000 units at a price of $15 per unit, what is the equilibrium price and quantity?

  • *Answer:*

  • Equilibrium price = $15 per unit
  • Equilibrium quantity = 1000 units

  • *Problem 2:*

  • A consumer is willing to pay $20 for a product, but the market price is $18. What is the consumer surplus?

  • *Answer:*

  • Consumer surplus = $20 - $18 = $2

  • *Problem 3:*

  • A company supplies 500 units of a product at a price of $12 per unit. If the market demand is 700 units at that price, what is the shortage?

  • *Answer:*

  • Shortage = 700 - 500 = 200 units

  • *Problem 4:*

  • A consumer's demand curve is given by P = 50 - 2Q. What is the consumer's willingness to pay for the 10th unit?

  • *Answer:*

  • P = 50 - 2(10) = $30

  • *Problem 5:*

  • A company's supply curve is given by P = 2Q + 10. What is the company's marginal cost?

  • *Answer:*

  • Marginal cost = 2

  • *Problem 6:*

  • If the demand curve is P = 100 - 2Q and the supply curve is P = 2Q + 20, what is the equilibrium price and quantity?

  • *Answer:*

  • Equilibrium price = $40
  • Equilibrium quantity = 30 units

  • *Problem 7:*

  • A consumer's income increases by 20%, leading to an increase in demand for a product. What is the income elasticity of demand?

  • *Answer:*

  • Income elasticity of demand = 1 (assuming unitary elasticity)

  • *Problem 8:*

  • A company produces two products, X and Y, with costs of $5 and $10 per unit respectively. If the demand curves are P = 50 - 2Q for X and P = 100 - 3Q for Y, what are the equilibrium prices and quantities?

  • *Answer:*

  • Equilibrium price for X = $20
  • Equilibrium quantity for X = 15 units
  • Equilibrium price for Y = $70
  • Equilibrium quantity for Y = 10 units

  • *Problem 9:*

  • A government imposes a tax of $2 per unit on a product. If the original equilibrium price was $10, what is the new equilibrium price?

  • *Answer:*

  • New equilibrium price = $12

  • *Problem 10:*

  • A company's demand curve is given by P = 200 - 5Q. If the company wants to increase revenue by 10%, what should be the new price?

  • *Answer:*

  • New price = $180

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Location:India, Andhra Pradesh, India

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