Question 4 a. The demand for stoves is given by QD=450–20P and the market supply is given by QS = 20 + 100P i. In equili

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Question 4 a. The demand for stoves is given by QD=450–20P and the market supply is given by QS = 20 + 100P i. In equili

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Question 4 A The Demand For Stoves Is Given By Qd 450 20p And The Market Supply Is Given By Qs 20 100p I In Equili 1
Question 4 A The Demand For Stoves Is Given By Qd 450 20p And The Market Supply Is Given By Qs 20 100p I In Equili 1 (29.6 KiB) Viewed 55 times
Question 4 a. The demand for stoves is given by QD=450–20P and the market supply is given by QS = 20 + 100P i. In equilibrium, how many stoves would be sold and at what price? (4 marks) ii. What would happen if suppliers set the price of stoves at $15? Explain the market adjustment process. (3 marks) iii. Using the response in part (1), calculate the price elasticity of demand for stoves when price changes to $10. (4 marks) b. The rent for apartments in Bridgetown has seen a significant increase during the pandemic. However demand has also seen a sharp increase. This conflict with the law of demand says that higher prices should lead to lower demand. Do you agree or disagree? Explain your answer. (3 marks)
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