Suppose there are 8,000 identical individuals in a market for Latin Dance videos, each with a demand function represented by Qdx=12-2Px, and 400 identical producers of Latin Dance videos, each with a supply function of Qsx=10Px.
- What is the market demand and market supply function for Latin Dance videos?
- How do I obtain the market equilibrium price and quantity using algebra?
-Derive the market demand and market supply schedule for dance videos at prices ranging from $1 to $6 and sketch the market demand and market supply curves and label the equilibrium price and quantity.
- Use the Demand equation to find the price elasticity of demand. Is the price elasticity demand elastic or in elastic?
- Interpret the elasticity of demand and state by how much quantity in demand would fall if price for dance videos would increase by 2%.