Demand and Supply problems Solving

 Here are 10 problems with answers on Demand and Supply:

• *Problem 1:*
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• 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?
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• *Answer:*
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• Equilibrium price = $15 per unit
• Equilibrium quantity = 1000 units
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• *Problem 2:*
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• A consumer is willing to pay $20 for a product, but the market price is $18. What is the consumer surplus?
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• *Answer:*
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• Consumer surplus = $20 - $18 = $2
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• *Problem 3:*
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• 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?
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• *Answer:*
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• Shortage = 700 - 500 = 200 units
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• *Problem 4:*
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• A consumer's demand curve is given by P = 50 - 2Q. What is the consumer's willingness to pay for the 10th unit?
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• *Answer:*
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• P = 50 - 2(10) = $30
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• *Problem 5:*
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• A company's supply curve is given by P = 2Q + 10. What is the company's marginal cost?
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• *Answer:*
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• Marginal cost = 2
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• *Problem 6:*
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• If the demand curve is P = 100 - 2Q and the supply curve is P = 2Q + 20, what is the equilibrium price and quantity?
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• *Answer:*
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• Equilibrium price = $40
• Equilibrium quantity = 30 units
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• *Problem 7:*
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• A consumer's income increases by 20%, leading to an increase in demand for a product. What is the income elasticity of demand?
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• *Answer:*
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• Income elasticity of demand = 1 (assuming unitary elasticity)
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• *Problem 8:*
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• 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?
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• *Answer:*
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• Equilibrium price for X = $20
• Equilibrium quantity for X = 15 units
• Equilibrium price for Y = $70
• Equilibrium quantity for Y = 10 units
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• *Problem 9:*
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• 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?
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• *Answer:*
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• New equilibrium price = $12
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• *Problem 10:*
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• 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?
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• *Answer:*
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• New price = $180