The pew demand is 20 percent below the original (using our convention that quantity demanded is reduced by20%at every price) Q%=(0.8(10.5-4P)=84-32 Equating this to supply. 84.3.2P=-4.5+16P,or P=0.672. With the 20 percent decline in the demand,the price of copper falls to 67.2 cents per pound. 9.Example 2.9 analyzes the world oil market.Using the data given in that example: a Show that the short-run demand and competitive supply curves are indeed given by D=24.08-0.06P Sc=11.74+0.07P First,considering non-OPEC supply: S.=Q=13. With Es=0.10 and P*=$18.Es=d(P/Q")implies d=0.07. Substituting ford,S and Pin the supply equation,c=11.74 and S.=11.74+ 0.07P Similarly,since Qp=23.Ep=(P*)=-0.05,and b=0.06.Substituting for b Q=23.and P=18 in the demand equation gives 23 =a-0.06(18).so that a =24.08 Hence Qp=24.08-0.06P. Show that the long-run demand and competitive supply curves are indeed given by D=32.18-0.51P Sc=7.78+0.29P As above.Es=0.4 and En=-0.4:Es=d(P/Q)and En=-b(P*/0).implving 0.4=d18/13)and-0.4=b18/23.S0d=0.29andb=0.51 Next solve for c and a: S.=c+dP and Qp=a-bP,implying 13=c+(0.29)(18)and 23=a-(0.51X(18). Soc=7.78anda=32.18 In 2002.Saudi Arabia accounted for 3 billion barrels per year of OPEC' production.Suppose that war or revolution caused Saudi Arabia to stop producing oil Use the model above to calculate what would happen toThe new demand is 20 percent below the original (using our convention that quantity demanded is reduced by 20% at every price): Q D = (0.8)(10.5 − 4P) = 8.4 − 3.2P. Equating this to supply, 8.4 - 3.2P = -4.5 + 16P, or P = 0.672. With the 20 percent decline in the demand, the price of copper falls to 67.2 cents per pound. 9. Example 2.9 analyzes the world oil market. Using the data given in that example: a. Show that the short-run demand and competitive supply curves are indeed given by D = 24.08 - 0.06P SC = 11.74 + 0.07P. First, considering non-OPEC supply: Sc = Q* = 13. With ES = 0.10 and P* = $18, ES = d(P*/Q*) implies d = 0.07. Substituting for d, Sc , and P in the supply equation, c = 11.74 and Sc = 11.74 + 0.07P. Similarly, since QD = 23, ED = -b(P*/Q*) = -0.05, and b = 0.06. Substituting for b, QD = 23, and P = 18 in the demand equation gives 23 = a - 0.06(18), so that a = 24.08. Hence QD = 24.08 - 0.06P. b. Show that the long-run demand and competitive supply curves are indeed given by D = 32.18 - 0.51P SC = 7.78 + 0.29P. As above, ES = 0.4 and ED = -0.4: ES = d(P*/Q*) and ED = -b(P*/Q*), implying 0.4 = d(18/13) and -0.4 = -b(18/23). So d = 0.29 and b = 0.51. Next solve for c and a: Sc = c + dP and QD = a - bP, implying 13 = c + (0.29)(18) and 23 = a - (0.51)(18). So c = 7.78 and a = 32.18. c. In 2002, Saudi Arabia accounted for 3 billion barrels per year of OPEC’s production. Suppose that war or revolution caused Saudi Arabia to stop producing oil. Use the model above to calculate what would happen to