Explore BrainMass

Explore BrainMass

    Demand & Supply

    BrainMass Solutions Available for Instant Download

    Supply and Demand

    Show the impact on the equilibrium price and quantity that results from; (1) an increase in demand and (2) an increase in supply.

    Economics - Demand and Supply

    Consider the following model of a market Qd = b0 + b1 P Qs = a0 + a1 P where Qd and Qs represent quantities demanded and supplied,P is price, and it is assumed that b0 >0, b1<0, b0 > a0, a1>0 and b0 a1 > b1 a0 . i)Find the reduced form solutions for equilibrium price and quantity. ii)Suppose a per

    Implication of demand of law

    Your are the chief economic advisor to the King of Terra. The king has observed that while the price of energy has increased 20 percent over the past five years, consumers have actually increased their energy consumption by 10 percent over the same period. It has been suggested to the King by a rival advisor that this proves th

    Economics - Econometrics

    Suppose we have estimated the slope of a supply curve and wish to test whether the supply is flat, that is. whether its slope is 0. What is the null hypothesis? Should we use a one tailed test? What is the alternative hypothesis?

    Finding Equilibrium Price and Quantity for monopolist

    The market demand function for a product sold by a monopolist is given below: QD = 120 - 4P The monopolist's marginal cost function is given below: MC = 1.5Q a) Find MR. b) Where do demand and MR intersect the quantity axis? c) Calculate the equilibrium price and quantity.

    Pricing and Profits: Suppose a manager of a profitable department store you are confronted with a pricing problem. You have two types of customers: a high-end type that are willing to pay a price of $20 for a pair of Levis Jeans, and a low-end type customer that are willing to pay a price of $13 for the same pair of jeans. Your supplier provided you with the jeans at $10 each and your extra costs are calculated at $1 per jeans. Your survey of your customers for jeans tells you that 50% of your customers are of the high end type and 50% are of the low end type. 1. If you decided to price high, what would be your expected profits per unit? 2. If you decided to price low, what would be your expected profits per unit? 3. Suppose your store attracts 1000 customers for these jeans: will you price high or low? And why?

    Suppose a manager of a profitable department store you are confronted with a pricing problem. You have two types of customers: a high-end type that are willing to pay a price of $20 for a pair of Levis Jeans, and a low-end type customer that are willing to pay a price of $13 for the same pair of jeans. Your supplier provided y

    Marginal Revenue and Marginal Cost

    I am having trouble setting up the attached problem and trying to figure it out. I would like to know the steps I need to do in order to come up with the solutions. Question: Suppose an airline flying on the Charolette-Chicago route has estimated the demand curves for three different types of customers: business (no advan

    Studying behavior of substitutes

    Suppose gasoline and hybrid vehicles are substitutes. On the back, draw a graph indicating what will happen in the market for hybrid vehicles if the price of gasoline increases. Be sure to label your graph carefully, putting Price on the vertical axis and Quantity on the horizontal axis. You do not need to have actual numbers

    Calculating Equilibrium Prices and Quantity

    Suppose the demand for guitars in State College is given by Qd = 9000 - 12P where Qd is the quantity demanded, and P is the price of guitars. Also, suppose the supply of guitars is given by Qs = 9P - 3852, where Qs is the quantity supplied of guitars. a)Calculate the equilibrium price of guitars and the equilibrium quantity

    The equilibrium quantity

    The market for milk is in equilibrium. Recent health reports indicate that calcium is asorbed better in natural forms as milk, and at the same time, the cost of milking equipment rises. Analyze the probable effects on the market.

    Maximizing profits

    The local space museum has hired you to assist them in setting admission prices. The museum's managers recognize that there are two distinct demand curves for admission. One demand curve applies to people ages 12 to 64, whereas the other is for children and senior citizens. The two demand curves are: PA = 9.6 - 0.08QA PCS

    Elasticities & Knowing the nature of related good

    The demand function for Good X is defined as Qx = 75 - 2Px - 1.5Py, where Py is the price of Good Y. Calculate the price elasticity of demand using the point formula for Px = 20 and Py = 10. Determine whether demand is elastic, inelastic, or unit elastic with respect to its own price and whether Good Y is a substitute or a compl

    Elasticity of demand: Example problem

    Discuss a good or service with an elastic demand. How would you behave if the good or service's price increased significantly? Discuss a good or service with an inelastic demand. What would you do if this good or service became much more expensive that it is now? If your income increased substantially, what goods or services

    Monopolist's profit-maximizing problem

    Problem: A monopolist has demand and cost curves given by: QD = 10,000 - 20P TC = 1,000 + 10Q +.05Q2 Find the monopolist's profit maximizing quantity and price?

    Supply and Demand/Equilibrium Quantity and Price

    I have read the material for Chapter 3: "Supply and Demand" located in Michael Parkin's book titled, "Economics" (8th ed.). From my readings, I understand that as the prices rises supply increases. I also understand that as demand increases supply increases. However, I have trouble understanding the concepts concerning equilibri

    Effect on supply, equillibrium price & quantity in short-run

    For each of the following changes, show the effect on the supply curve, and state what will happen to market equilibrium price and quantity in the short run. a. The government requires pollution control filters that raise production costs. b. Wages of workers in this industry fall. c. There is an improvement in technology

    Current trends in macro and microeconomics

    We make choices as consumers every day. Opportunity cost is defined as a person's "next best alternative" or "the cost of what you give up when you make a choice." Think of a recent decision you made regarding your career. What was your opportunity cost for making that choice? What was your "next best alternative"? Objecti

    Demand and Supply Linear functions

    The following relations describe monthly demand and supply for a computer support service catering to small businesses: Qd=3,000 -10 P Qs=-1,000+ 10P where Q is the number of businesses that need services and P is the monthly fee, in dollars. a) At what average monthly fee would demand equal zero? b) At what av

    Supply and demand

    Joy's frozen yogurt shops have enjoyed rapid growth in northeastern states in recent years. From the analysis of joy's various outlets, it was found that the demand curve follows this pattern. Q=200-300P+120 I +65T-250Ac+400 Aj Q= number of cups served I= per capita income T= average outdoor temperature Ac= competition's m

    Perfect Competition

    Several theories of direct investment highlight firm-- specific and/or home-country-specific advantages that enable a multinational corporation (MNC) to compete against host-country firms that typically are more familiar with the local business environment and do not have high costs associated with operating a project or subsidi

    Compute the number of units and the unit price

    Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX? Compute the number of units and the price at which those units will be exchanged when there is an $8 per unit price floor.

    Equilibrium price

    1. Suppose the government wishes to spur the production of soybeans for their potential usage in making biodiesel in order to reduce our dependence on foreign oil. Further suppose that the market demand and supply for soybean oil are given by QD = 100 - P and QS = 50 + .3P, where Q = barrels of soybean oil, and P = price per ba

    Microeconomics - Demand and supply

    Assume that the perfectly competitive widget industry consist of exactly 1,000 firms and is initially in a long run equilibrium. Assume that the widget industry is a constant cost industry and, for simplicity, assume that there is only one plant size available. Subsequently, a permanent increase in price of a gadget (a substitut

    Business formation codes

    1).Identify fee business formation code(s) in California 2). Describe the process for obtaining an annual filing report for a corporation currently registered in California

    Determining the Demand Function

    Suppose the demand function of a firm is given by Q + P - 200 = 0 and the cost function is given by TC = 12 + 3Q, where P is the price of the good and Q is the quantity produced. Find the largest quantity the firm can produce consistent with: i)breaking even: ii)making profits of 9232: iii)making a loss of 245.

    Price Elasticity of Demand: Products and Gasoline

    1. A rise in the price of a certain commodity from $15 to $20 reduces quantity demanded from 20,000 to 5,000 units. Calculate the own-price elasticity of demand and state whether the demand for this product is elastic or inelastic. If each nit costs $10 to produce, was this a wise move for the company's profit position? Why?

    Managerial Economics

    1. A monopoly produces widgets at a marginal cost of $10 per unit and zero fixed costs. It faces an inverse demand function given by P = 50 - Q. Which of the following is the marginal revenue function for the firm? A. MR = 60 - 2Q B. MR = 50 - Q C. MR = 100 - Q D. MR = 50 - 2Q 2. A firm with market power has an individua

    Price Ceiling Political Leader

    1.A political leader comes to you and wonders from whom she will receive the most complaints if she institutes a price ceiling when demand is inelastic and supply is elastic. Using the tools of economic, analysis, how do you respond?