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dd-ss

N

neha.neu

Member
suppose the slopes of the inverse mky dd and mkt supply curves are
(dp/dq )(dd)= -3/4

(dp/dq0 (supply)= 1/2

respectively. Following a shift of the supply curve , the equilibrium output in the market increases by 40 units. What is the associated level of change in price level?
 
There will be a movement along the demand curve. You know the slope is -0.75 and you know that the change in output is 40 so the change in price must be 40 x -0.75 = -30.
 
Last edited by a moderator:
This helps. the basic problem was i did not know what the slope of the inverse dd curve was . tell me if am right ?

The inverse dd curve is expressed as p=a + b q and b is the slope . So if we are given the slope of the inverse dd curve we are simply given b . any change in q would effect price by b* q .

Am i getting it right?

and also what is the slope of the budget line 100= X+ y ?

How do we determine it?

elementary questions but am not from an economics or mathematics background and need help.
 
If the equation of the demand curve DD is given by Y=mx+c, m=slope. Hence if the equation of X+Y=100, change its form therefore you get Y=-(1)X+100. Hence m=slope = -1.
 
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