Demand and supply functions

Suppose the demand and supply functions of Chicago’s Bloom Chocolate factory are given as follows:Q = 5 + 2PQ = 15 – 3PA) Indicate which of the equations above is the supply function, and which is the demand function. Justify your answer and show the demand and supply functions on a graph. Carefully label the axis. (2 points)
B) Find the equilibrium price and quantity. (3 points)
C) Assume the price level falls 10% below the equilibrium price, derive the point price elasticities of demand and supply. Is the demand for chocolate elastic, inelastic, or unit elastic? How about the supply? (6 points)
D) Now, suppose that an excise tax is imposed on chocolate. Would the burden of the tax fall mostly on consumers, mostly on producers, and approximately equally, or is it impossible to tell? Explain.

Do You Need A Similar Assignment?

Place an order with us. Our skilled and experienced writers will deliver a custom paper which is not plagiarized within the deadline which you will specify.

Note; 6 Hours urgent orders deliver also available.

If you need more clarifications contact our support staff via the live chat for immediate response.

 

Type of paper Academic level Subject area
Number of pages Paper urgency Cost per page:
 Total: