Question

1.1 The demand and supply market are given as follows: Qd= 124 - 4P and Qs = -16+3P
1.1.1. Calculate the equilibrium price and quantity exchanged in this market and
illustrate it on the graph? [03]
1.1.2 Suppose that the market supply increases by 100%, answer the following:
a) What is the new market supply? [02]
b) what will be the effect of the change in market supply on the clearing price
and quantity? Show all your calculations. [04]
c) Use a clearly labelled graph to show the effects of the changes in market
supply. [04]
1.2 Money is regarded as a factor of production. Do you agree with this statement? Support
your answer with reasons

Answer 1

Answer:

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