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Exercise 1:
Given that the demand curve for gizmos is
P = 60 - 3
Q
d
and the supply curve is
P = 40 +
Q
S
;
Calculate the shortage or excess supply of gizmos if the price of gizmos is $48.
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Calculate the equilibrium amount of gizmos exchanged. (Q*)
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Calculate the equilibrium price of gizmos exchanged. (P*)
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New technology causes an outward shift in the supply curve. Calculate the new equilibrium quantity (Q*) exchanged if this new curve is
P = 30 +
Q
S
, and ....
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Calculate the new equilibrium price of gizmos (P*).
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