How does an increase in the price of widgets affect the: And describe the effects in detail?: a. Demand for widgets b. Supply of widgets c. Demand for woozles if widgets and woozles are substitutes d. Demand for gadgets if widgets and gadgets are complements
Using one of the elasticities discussed in the chapter, give an example of how you would use this information to set the price for your product in the market place. Explain one factor in detail about how shifting demand and supply curves makes market demand estimation difficult **Must be properly cited from credible source
The market demand and supply functions of copper are as follows: QD = 10 -50PC + 0.3I + 1.5TC + 0.5E where: QD = quantity demanded of copper (millions of pounds) PC = price of copper ($ per pound) I = consumer income index TC = telecom index E = expectation index QS= -86 + 90PC â?" 1.5W + 0.5T + 0.4N where: QS = q
We are all familiar with fluctuating prices of gasoline at the pump. Why does this happen? Research the recent history of gasoline pricing in your area, and attempt to relate any fluctuations you observe to documented supply and demand factors, as outlined in our book. Be sure to cite any references used. Why do the gasoline
Please help with the following economics problem. The state Medicaid agency has set a rate of $5.50 per visit for all Medicaid enrollees who visit a physician. Each physician also has private paying patients. The demand curve for each physician can be characterized as follows, and physicians can be regarded as individual mon
Suppose that both the equilibrium price and quantity of golf clubs rise. Which of the following explanations would best explain this outcome? a. A decrease in demand for golf clubs with no change in supply. b. An increase in supply of golf clubs with no change in demand. c. A decrease in demand for golf clubs and a decrease
Two firms produce differentiated products and set prices to maximize their individual profits. Demand functions for the firms are given by Q1 =64 -4P1 +2P2 Q2 =50 -5P2+ P1 where P1, P2, Q1, Q2, refer to prices and outputs of firms 1 and 2 respectively. Firm 1â??s marginal cost is $5 while firm 2â??s marginal cost is $
What is the difference between Equilibrium price and Equilibrium quantity. What role does elasticity place?
About the relationship between interest rates and the demand for money I have to say that it is missing a factor called confidence. Many economists have said before that if the rate declined, the demand for money will rise and the contrary would be true. However, real life even if rates declined to historically low rates, if the
Suppose the market demand for pizza is given by Qd=300-20p and the market supply for pizza given by Qs=20p-100, where P=price (per pizza). Graph the supply and demand schedule for pizza using $5 through $15 as the value of p. In equilibrium, how many pizzas would be sold at what price?
1. Explain what happens to price and quantity of milk when the following events occur: a. An advertising campaign highlights scientific studies that find drinking milk can help reduce weight gain. b. There is a mad cow disease epidemic. c. The price of milk decreases. d. The government decides to im
The domestic sewing machine manufacturing industry is highly concentrated with only three active firms. Annual output and the marginal cost of production for "free arm" models produced by each company are as follows: Marginal Cost Annual Output (million) Frantic Frasier (F) Neurotic
What is the equilibrium price of a widget? Is this the long-run equilibrium price, and if so, how did you know this?
Market Structure Problem #1: The Widget Industry: The Widget industry is perfectly competitive. The lowest point on the long-run average cost curve of each of the identical widget producers is $4 and this minimum point occurs at an output of 1,000 widgets per month. When the optimal scale of a firm's plant is operated to pr
This solution answers the following concerns: Credentialing of foreign physicians is one solution that governments are examining to reduce shortages in hospitals and family practices. What is the predicted impact on the supply of physicians with regard to the following: a. Increased residency and fellowship wages for foreign
The marketing team for a restaurant wants to determine the price elasticity of demand coefficient for its steak dinner. It priced its dinner at different price points in local restaurants to see how many would be sold at different prices. The following is the result of the price trials: Price Quantity $15 1000
1. Give a brief summary of economic costs. In the short-run, why might a firm still operate even when there is a loss. 2 Explain the law of diminishing returns.
Philip's demand curve for housing is shown in the figure below. (Assume that quantity of housing is measured simply by the number of square metres. Other aspects of quality are ignored.)The market price of housing is P1; Philip can purchase as much housing as he desires at that price. Alternatively, Philip can live in public hou
1. John's Lawn Mowing Service is a small business that acts as a price taker (MR = P). The prevailing market price of lawn mowing is $20 per acre. John's costs are given by total cost = .1q^2 + 10q + 50 where q = the number of acres John chooses to cut a day a. How many acres should John choose to cut in order to maximi
Suppose that your demand schedule for cell phone applications is as follows: Quantity Demanded per Year Quantity Demanded per Year Price per Application (income = $40,000 per year) (income = $50,000 per year) $ 2
Consider what your firm produces( tools ). What are some things that would change the demand for your product? What are some things that would affect changes in supply? How can quantity demanded be changed? What if the government raised the minimum wage. How would this policy effect your firm?
2 Multi-Choice Economic Problems If a price increase from $5 to $7 causes quantity demanded to fall from 250 to 100, what is the absolute value of the own-price elasticity at a price of $7? A)1.75. B) 5.25. C) 0.19. D) 2.15. Mitchell's money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and income, Mitchell buys 50 units of X and 25 units of Y. Call this combination of X and Y bundle J. At bundle J Mitchell's MRS is 2. Given these prices and income, what is Mitchell's equilibrium consumption of X? A) X < 50. B) X = 50. C) X > 50. D) X = Y.
If a price increase from $5 to $7 causes quantity demanded to fall from 250 to 100, what is the absolute value of the own-price elasticity at a price of $7? A)1.75. B) 5.25. C) 0.19. D) 2.15. Mitchell's money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and income, Mitchell buys 50
Problem-solving exercises: (a) Use the arc-approximation formula to calculate the price-elasticity of demand coefficient of a firm's product demand between the (quantity, price) points of (100, $20) and (300, $10).
1.- The price elasticity of demand for imported whiskey is estimated to be -0.20 over a wide interval of prices. The federal government decides to raise the import tariff on foreign whiskey, causing its price to rise by 20%. Will sales of whiskey rise or fall, and by what percentage amount? 2.- In an article about the fina
Analyze the basis for the trends in consumption patterns, as discussed in any article. Consider the utility derived from the products mentioned in the article. Describe what has occurred to change the demand for, or the supply of, the products, and market prices of those products. .
Suppose your firm competes against another firm for customers. You and your rival know your products will be obsolete at the end of the year and must simultaneously determine whether or not to advertise. In your industry, advertising does not increase total industry demand but instead induces customers to switch among the produc
I need help understand What does it mean to say that the demand for resources is a derived demand? Is the demand for all goods and services a derived demand?
Taxes, MPB, MSB a. Calculate the equilibrium price and quantity (million packs/year) before the tax is imposed. In the figure from our notes, this is where MSC = MPB. b. Using the conditions above, calculate Pb and Ps after the tax is imposed. What portion of the 0.50 tax are consumers paying? What portion of the tax are producers paying? c. Using either Demand or Supply from above, determine the total quantity (packs of cigarettes) produced and consumed after the tax is imposed. d. Using the arc elasticity formula, calculate the price elasticity of demand over this part of the demand curve (i.e. P0 and P1 in the figure). e. What is the amount of tax revenue per year raised by government from the imposition of the per-unit tax? f. The cost to consumers and producers, however, will be more than the taxes paid for cigarette production and consumption. That is, even though government has decided that before the tax there was overconsumption, after the tax both producers and consumers lose out on producer and consumer surplus, respectively. What is the deadweight loss from the tax? g. How would society (all individuals) know that this tax is beneficial? Explain.
Suppose the federal government (back in 1985?) decided to encourage an efficient amount of cigarette consumption by imposing a per-unit tax of $0.50, on cigarette manufacturers equal to the vertical distance between MPB and MSB at Q1 as shown in the figure given. We can use linear demand and supply curves to calculate the effect
Please provide assistance: 1). Explain how a market economy compensates for a market surplus. What about a market shortage? How does the relate to laissez-faire. Explain how the market system works to answer the four fundamental economic questions. What are some factors that may cause the market system to not function effect
1. Find a product (possibly a commodity) traded in the global market and examine how the price of the product has changed over the past 10 years. How have these price changes reflected the law of supply and demand? Be sure to discuss both movement along the supply/demand curve as well as shifts in the curves. (A graph in excel,
Consider a price-taking firm in the competitive industry for raw chocolate. The market demand and supply functions for raw chocolate are estimated to be Chocolate demand: Q = 10,000-10,000P+2M Chocolate supply: Q = 40,000 + 10,000P- 4,000PI Where Q is the number of 10 pound bars per month, P is the price of a 10 pound b