The Demand and Supply Functions for Sweatshirts the Basic Grey

question 26

Essay

The demand and supply functions for sweatshirts the basic grey kind) are as follows:
The equations for the demand and supply functions above are as follows:
Qd = 20,000 - 500P Qs = -8,000 + 3000P
a. Solve for the equilibrium price and quantity. Hint: at equilibrium, quantity supplied equals quantity demanded.)
b. Assume the supply function changes to:
Qs = -5,000 + 3000P
Does supply increase or decrease? What is the new equilibrium price and quantity?

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Definitions:

Arbitrage

The practice of buying and selling assets to profit from price differences in different markets.

Trade Policies

Laws and regulations enacted by governments to manage international trade, designed to protect domestic industries, control exports and imports, and foster economic growth.

Trade Balance

The variance between what a nation sells and buys from abroad in terms of goods and services.

National Saving

The total amount saved by a nation's households and businesses, plus government budget surplus, which can be used for investment.