Question the supply and demand functions for natural gas, Ask an Expert

Economics

Question: The supply and demand functions for natural gas from 1950 to 2007 are followings.

Q_S = 0.02 + 0.7P_g + 0.045P_o + 0.06I

Q_D = 148.82 - 1.8P_g + 0.069P_o + 0.05I

Where P_g is the price of natural gas, P_o is the price of crude oil, the average price of oil is about $50 per barrel, and the income is $5000.

(i) What is the equilibrium price and quantity for natural gas, i.e. (P_g*,Q_g*)? Explain verbally!

(ii) Calculate the price elasticity, income elasticity and cross price elasticity for the demand of natural gas at the equilibrium, and explain briefly.

(iii) Calculate the price elasticity, income elasticity and cross price elasticity for the supply of natural gas at the equilibrium, and explain briefly.

(iv) Explain the supply and demand functions briefly, e.g. the estimates of variables and their positive/negative signs.

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M92586676

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question with the introduction of new technology it becomes

Question: With the introduction of new technology, it becomes easy to purchase items without the use of direct money. How do you think the introduction of this new technology affects the amount of currency in the economy ...

Question 1 what is an industry cluster and what does a

Question: 1 ) What is an industry cluster and what does a cluster mean for employment, services, infrastructure? 2) What is "an incentive based economic development strategy"? The response must be typed, single spaced, m ...

A market with q 16p-2 is supplied by a monopoly with cost

A market with Q = 16*p^-2 is supplied by a monopoly with cost C(Q) = 6 + Q^2/8. Calculate the equilibrium price, output and monopoly profits. What should be the equilibrium if the market were supplied competitively by fi ...

Question assume that the demand for diamond rings is q 24

Question: Assume that the demand for diamond rings is Q = 24 - P, and each ring contains one diamond. The marginal cost for DeBeers of mining a diamond is $2, and an independent retailer's marginal cost of retailing is $ ...

Question in an effort to stop the migration of many of the

Question: In an effort to stop the migration of many of the automobile manufacturing facilities from the Detroit area, Detroit's city council is considering passing a law that would give investment tax credits to auto ma ...

Question practice critical thinkingdefine in three to four

Question: Practice critical thinking Define in three to four sentences, in your own words, the difference between inductive and deductive arguments. Explain in three to four sentences what the difference is between valid ...

Question the demand curve for round trip air transportation

Question: The demand curve for round trip air transportation between cities is given by Q= 5,000P^-0.8 X^0.2 y^0.5 z^.2 where P is price, x is flying time, y is air distance, and z is total population in the two cities. ...

Question what is the consumer price index cpi and how is it

Question: What is the Consumer Price Index (CPI), and how is it determined each month? What effect does inflation have on the purchasing power of a dollar? How does it explain differences between nominal and real interes ...

Question an economy has the production function y a k03

Question: An economy has the production function Y = A (K^0.3) (L^0.7) where A = 1 and (L^0.7) = 10. The depreciation rate is 10% and the investment rate is 30% of output. a. Compute the steady state level of capital. b. ...

Question draw a graph that depicts the balance between the

Question: Draw a graph that depicts the balance between the marginal benefits of flossing your teeth in terms of the number of flossings per week and the marginal costs of flossing your teeth in terms of the expenditure ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Microeconomics Expert