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Managerial Economics: Vanda-Laye oven mittens

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I need some help with this assignment, specifically with the equation portion done in excel. I would greatly appreciate the help.

You are an economist for the Vanda-Laye Corporation, which produces and distributes outdoor cooking supplies. The company has come under new ownership and management and will be undergoing changes in its product lines and operating structure. As an economist, your responsibilities include examining the market factors that affect success or failure of a product, including the supply and demand for the product, market conditions, and the behavior of competitors with similar products.
Your supervisor, Jorge, has assigned you the task of evaluating a new product. The new product, oven mittens, has several competitors in the marketplace, but your company will be using a new patented material that provides protection from heat and maintains a great deal of flexibility. The supply and demand functions for oven mittens are as follows:
Qd = 45 - 6.9P
Qs = -15 + 10P
where Qd is the quantity demanded, Qs the quantity supplied, and P the price.
Tasks:
Jorge has asked you to research the market and provide detailed responses to the following questions:
• What is the equilibrium price and quantity for oven mittens? Using Microsoft Excel, construct a table that shows the quantity demanded, the quantity supplied, and the surplus or shortage associated with prices from $2 to $5.55. (Use appropriate intervals.) Indicate the level at which equilibrium is achieved. Graph the data, indicating the equilibrium level and the areas of shortage or surplus.
• If a price floor were established at $4, what would happen in this market? Explain your answer.
• If a price ceiling were established at $3, what would happen in this market? Explain your answer.
• What will happen to the demand curve for the product if the following changes occur? Answer separately for each change, assuming each event to be independent of the other:
o The price of the substitute Good A increases.
o The price of the complementary Good C increases.

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Solution Preview

>What is the equilibrium price and quantity for oven mittens?

Equilibrium is the price at which Qd = Qs

Let Qd = Qs
45 - 6.9P = -15 + 10P
60 = 16.9P
P = 60/16.9 = $3.55
Q = 45 - 6.9(3.55) = 20.50

The equilibrium Price and Quantity are $3.55 and 20.50

>Using Microsoft Excel, construct a table that shows the quantity demanded, the quantity supplied, and the surplus or shortage associated with prices from $2 to $5.55. (Use appropriate ...

Solution Summary

This solution shows how to calculate the equilibrium Price and Quantity in the market for oven mittens produced by the Vanda-Laye Corporation. The solution includes an Excel spreadsheet that shows the equilibrium conditions and illustrates them with a graph. The Excel file also illustrates the effects of a price ceiling and price floor, and of shifts in the demand curve for oven mittens.

$2.19