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
