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Demand & Supply

Problem Set

1. Suppose the demand curve for a good is given by the equation P = 200 - .5Q, and the supply curve is given by the equation P = 50 + .25Q, where P = price and Q = quantity. A. What are the equilibrium price and quantity? B. Suppose a sales tax of $9 / unit is levied. Find the new equation for demand, the new equilibrium Q


Chapter 5 DEMAND ANALYSIS Mark Hirschey Managerial Economics 11th edition. Q5.5 "When I go to the grocery store, I find cents-off coupons totally annoying. Why can't they just cut the price and do away with the clutter?" Discuss this statement and explain why coupon promotions are an effective means of promotion for groce

Market Demand and Price Elasticity

I need help with this study question. Professor Kenneth Warner of the University of Michigan has estimated that a 10 percent increase in the price of cigarettes results in a 4 percent decline in the quantity of cigarettes consumed. For teenagers, he estimated that a 10 percent price increase results in a 14 percent decline in

Economics and management

1. Consider the following table for the demand and supply of a certain product: Price Quantity Demanded Quantity Supplied $1000 0 500 $750 125 375 $500 250 250 $250 375 125 What is the equilibrium price and quantity? P = $250, Q = 125 P = $500, Q = 250 P = $750, Q = 125 P = $1000,


1. You are given the following information on two securities, the market portfolio, and the risk free rate: (See attached file for full problem description with chart) For parts a, b, and c, use the above Table. a. Draw the Security Market Line. b. What are the betas of the two securities? c. Plot the two securities o

Increase minimum wage

The AFL-CIO has been a proponent of increasing the minimum wage. Please help me to understand why.

Supply Curve

The question was to assume that the market for electric toasters is competitive and that the quantity supplied per year depends as folows on the price of a toaster: Price of a Toaster Number of Toasters Supplied (millions) 12

Labor Econ

Imagine a Congressman is proposing to improve the welfare of every citizen in the U.S. by paying a base income of $1,200 a month to everyone regardless of income,a ssets, age, etc. The argument of the congressman is that by doing so people could work in jobs "they really like" instead of working just to earn an income. What do

SBC & ATT Merger

With the merger of SCB and ATT, what, if any, cost advantages might be created? What actions, if any, do you think the government will take? are there specific facts to support your answers What will be the welfare effects, if any of the merger?

Cost & Demand

Please step me through the calculations & logic behind this situation: You are the CEO of PC Warehouse, a firm which manufactures customized computers to meet the specifications of their clients. Nearly 85% of your customers are businessmen. Your firm is not the only business that makes the custom computers, but competes wi

Estimate the demand of one of your hotels

As the manager of a local hotel chain, you have hired an econometrician to estimate the demand of one of your Hotels (H). The Estimation has resulted in the following demand function: Q (H) = 2,000 - (PH) - 1.5 (PC) - 2.25P ( P SE) + 0.8 (P OH)+ .01 (M) Where the following to solve: P= Price (H) is Hotels, (PH) is the pr

Cost function

I need to define the cost function of a firm given the production function, rent and labor costs. Also about the equation that would minimize costs and the respective ratio.

Microeconomics problem

1. In 1999, the bidding for a human kidney offered on the Internet auction site eBay hit $5.7 million before the company put a stop to it citing a federal law that makes it illegal to sell one's own organs. Using a supply and demand graph, explain this bidding phenomenon given that the federal law mandates a price of zero for

Supply and Demand

Supply and Demand, Elasticity 1) In the U.S. it is illegal to buy or sell heroin, yet there is still a market. Suppose the government's main goal is to decrease the amount of heroin consumed and proposes three solutions. For each of these, show what would happen to the market price and quantity for heroin. Briefly discuss you

Economics of internet

Suppose that it is possible to provide internet backbone capacity at a constant marginal capital investment of $5 per megabit per second (mb/s). There are no marginal costs. There are two time periods during the day (for simplicity each will be 12 hours): day and night. During the peak period (daytime) of 250 business days p

Concepts of demand, supply and elasticity

Choose 3 Micro concepts that are important or interesting, describe them briefly, explain how all three are inter-related, and what relevance they would have to one's life.

Monopolistic Competition-Shift in the Demand Curve

There are indeed several reasons why economic profits are short-lived: new-entrants with the same strategy, competitive reaction by producers of differentiated products, and close enough substitutes, etc. So that I can remember something that is conceptually simple, I would like to see a description in graphical terms of the mec

Managerial Economics

I am looking to sell some T-shirts at my university and want to figure out the economics of the market. The total demand for these t-shirts comes from two groups: group A and group B. The demand curves for these two groups are given by the following equations: Students; Qa = 120 − 10Pa Faculty: Qb = 48 − 2Pb

Price Elasticity of Demand of Apples

Suppose the price of apples rises from $3 a pound to $3.45 and your consumption of apples drops from 30 pounds of apples a month to 21 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it elastic, inelastic, or unitary elastic?

Intro to Economics

Describe three ways in which the Federal reserve can change the money supply. If the Federal Reserve is going to adjust all of these tools during an economy that is growing too quickly, what changes would they make? If the Federal Reserve is going to adjust all of these tools during an economic recession, what changes woul

What is the impact of quotas on the US Steel market?

"US consumer is seen as big loser in new restraints on imported steel" said a recent Wall Street Journal headline. The big gainers from the quota limitations on imported steel were predicted to be US producers, who would sell more, and foreign producers, who would sell less but at a higher price. Is this prediction correct, if s

Demand equation

Please help with the following problem. Air Express, an overnight mail carrier, provides one flight per day from Portland, Maine to Hawaii. Currently Air Express flights have been operating at 80% capacity (maximum capacity 400 pounds). Therefore each flight has the potential to carry 80 additional pounds of mail. Air Expres

Microeconomics ( equilibrium )

The Efficient Number of Firms Suppose the oil industry in some country is perfectly competitive and all firms extract oil from a common, and endless pool. The cost of operating a well is #1,000 for one year, and the firm can sell any amount it chooses at the world price of $10 a barrel. If N wells are operating, the output

Elasticity of Demand

A) In response to increasing thefts by drug addicts, the government passes legislation increasing both the penalty and probability of punishment for suppliers of illegal drugs. What would be a good prediction of what would happen to the rate of property crime committed by drug addicts if the price elasticity of demand for illega

Supply and Demand Funtions

P=200-3Q P=20+Q A) How do I know which equation is supply and which is demand? How can I calculate the amount of shortage or surplus that would prevail at a price of $25 per unit? In terms of economic surplus, who gains and who loses? B) Using the same supply and demand equations, can you explain and determine graphically

Developments in demand and supply

Question 1: analyze developments in demand and supply in the past few years in a market known to you (e.g. where you worked or a housmg market known to you). Include in your analysis an explanation of the determinants of demand and supply, recent changes in demand and supply, elasticity of demand and supply, and the impa

Economic Concept

Back in the 1960s, President Lyndon Johnson passed legislation that increased expenditure for both the Vietnam War and social problems in the US. Since the US economy was operating at its full employment level when President Johnson did this, he appeared to be ignoring what economic concept?


Problem Set #5 Pizza restaurants are identical and exist in a market that is perfectly competitive. Marty's pizza parlor faces the following demand and costs... a) Derive the profit-maximizing output quantity and the profits that are achieved. b) Is the market in long-run equilibrium? If not, decribe what will happen in t

Price Discrimination Strategies

Should the company use price-discrimination strategies to improve profitability? Please see the attached for full background.