Demand and Supply question

dubfire · #1 $Old$ July 17th, 2009, 06:25 AM

Hi, I just found this forum and thought it'd be a good idea to join because I suck at Financial Maths

and I'm repeating it in a month. I need help pretty bad (I'm not desperate for it, it's just I'm utterly useless at it)
Here's the question I have anyway :
The demand and supply functions for a good are given by
Demand function : P=100-.05Q
Supply function : P= 10 +0.5Q

(i) Analyse the effect of the introduction of a price ceiling of €40 in this market.
(ii) Calculate the profit made by black marketeers if a black market operated in this market.

CaptainBlack · #2 $Old$ July 19th, 2009, 11:27 PM

Quote:

Originally Posted by dubfire $View Post$

Hi, I just found this forum and thought it'd be a good idea to join because I suck at Financial Maths

and I'm repeating it in a month. I need help pretty bad (I'm not desperate for it, it's just I'm utterly useless at it)
Here's the question I have anyway :
The demand and supply functions for a good are given by
Demand function : P=100-.05Q
Supply function : P= 10 +0.5Q

(i) Analyse the effect of the introduction of a price ceiling of €40 in this market.
(ii) Calculate the profit made by black marketeers if a black market operated in this market.

Rearranging the equations the demand at price p is:

d=2000-20p

and the supply is:

s=2p-20.

CB