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16 April, 08:55

1. Using the given demand and supply equations, calculate the effect of a 35 -percent increase in copper demand on the price of copper. Note: use the initial equilibrium values for P * (= $3.00) and Q * ( = 18 million metric tons) when calculating the changes below. As a result of this change in demand, the price of copper will

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  1. 16 April, 11:41
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    The new price of copper will be 3.48 dollar per metric ton

    Missing inf:

    the demand equation is Q = 27 - 3P

    the supply equation is Q = - 9 + 9P

    Explanation:

    If demand increase by 35:

    Qd = (27-3P) x 1.35

    Qd = 36.45 - 4.05P

    Now, we solve for the new equilibrium Price will ve:

    36.45 - 4.05P = - 9 + 9P

    36.45 + 9 = 9P + 4.05P

    45.45 = 13.05P

    P = 3.48275862 = $3.48
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