Economics Assignment Sample

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Added on 2021-04-24

Economics Assignment Sample

Added on 2021-04-24

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Running head: ECONOMICS ASSIGNMENTEconomics AssignmentName of the universityName of the studentAuthor Note

1ECONOMICS ASSIGNMENTTable of ContentsAnswer 1:...................................................................................................................................2Answer 2:...................................................................................................................................3Reference:..................................................................................................................................6

2ECONOMICS ASSIGNMENTAnswer 1:The market demand (QD): Qd =150,000,000 -5,000,000PThe market supply (QS): Qs = 50,000,000 -10,000,000PUnder perfect competition, equilibrium market price and quantity can be obtained byequating the market demand and supply curve (Stiglitz, Yun and Kosenko 2017).a)the equilibrium market price and quantityQd = Qs150,000,000 -5,000,000P = 50,000,000 -10,000,000P10,000,000P - 5,000,000P = 50,000,000 - 150,000,0005,000,000P = - 100,000,00P = -20Putting this value in market demand equation:Q = 250,000,000The equilibrium market price is -20 and the equilibrium amount of quantity is250,000,000b)In part a, the equilibrium market price is showing by a negative value, which impliesthat the market has excess supply of output by the amount 250,000,000. Hence, under perfectcompetition, to sale this excess amount, each firm needs to pay 20 to their customers (Chenand Zhang 2018). Here, total number of identical firms is 10,000.

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