QUESTION 28 The following relations describe demand and supply conditions in the

Question

QUESTION 28 The following relations describe demand and supply conditions in the lumber industry. Q is the quantity of lumber, measured in thousands of square feet and P is the price in dollars. Supply: Qs=-15,000 + 50,000P Demand: QD5,00010,000P Find the quantity supplied Will there be shortage or surplus? How much will be the shortage or surplus? and quantity demanded at the price of $1.00. QUESTION 29 The following relations describe demand and supply conditions in the lumber industry. Q is the quantity of lumber, measured in thousands of square feet and P is the price in dollars. Supply:15,000+50,00P Demand: Q75,000 10,000P Find the quantity supplied Will there be shortage or surplus? How much will be the shortage or surplus? and quantity demanded at the price of S0.50.

Explanation / Answer

Ans 28)

When P=$1 then

Qd=75000-10000(1)=65000

Qs=-15000+50000(1)=35000

Hence Qd>Qs therefore ther will be excess demand because Qd-Qs>0 ...Shortage

And Shortage will be 65000-35000=30000

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