17. Answer the next three questions based on theright-hand side demand and supply modelfor a business firm producing motorcycles.Assume that 300 motorcycles is the optimaland most profitable level of production forPrice ($)3020the firm. All dollars are in thousands.10300Motorcycles(a) What are the equilibrium price and quantity at the medium level of demand (DM)?The equilibrium price is $and the equilibrium quantity ismotorcycles.(b) What will be the equilibrium price and quantity if there is a demand shock that unexpectedlylowers demand (DL)?The equilibrium price will be $mithe equilibrium quantity will bemotorcycles.(c) What can you conclude will happen to prices and output when this model is shocked by changesin demand?The price of motorcycles is (flexible, inflexible) in this model. A change in demand formotorcycles results in a price change to achieve equilibrium at the set quantity ofmotorcycles produced. We can conclude that the number of motorcycles produced staysconstant but the price of motorcycles changes.

As demand and supply shown in the graph where 300 units of bike production is optimum profit level…

Answered: 17. Answer the next three questions…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

3. A demand equation for rice is Quantity = 100 - 10(Price) + 5(Income). Show your calculations in responding to these questions. a) What is the quantity when P-10 and Income 20? b) What is the price elasticity of demand when the Price is 10 and the Income is 20? c) What is the income elasticity of demand at this price and quantity? %3D
11. Calculating %age Exx *3* When the price of product "X" increases 15 percent (+15%), the quantity demanded of "X" decreases 12 percent (-12%). The price elasticity of demand for "X" is: O "-1.25" and the demand for "X" is "relatively inelastic." "-1.25" and the demand for "X" is "relatively elastic." O "-1.25" and "X" is a "normal" good. O "-0.80" and the demand for "X" is "relatively elastic." O "-0.80" and the demand for "X" is "relatively inelastic." Save & Continue Continue without saving
1. Predict the impact on equilibrium price and quantity for the relevant market given the following changes. 1. What will happen in the market for home computers if: a)consumers become more familiar with the use and benefits of home computers. b)there is a technological cost saving breakthrough in producing home computers. c) both (a) and (b) occur simultaneously. Please support with a graph.
1. Online the timing and tailoring of prices to specific models of products is the key to successful pricing in online markets. And “Thanks to the ready availability of data in online markets, a pricing manager can easily approximate the elasticity of demands for the different products it sells online.” Assuming a 10 percent decrease in price increases sales by 28 percent, calculate the price elasticity of demand? If the wholesale price of the online product is $50 and sells at a price comparison site that charges $.50 per click and boasts a conversion rate of 5 percent (an average of 20 clicks are needed to generate a sale). What price should you charge for the product? What is the optimal markup on cost? 2. The authors assert that price sensitivity is affected by (1) product life cycles, and (2) numbers of competitors. In fact, “when the number of competing sellers doubles, a firm’s elasticity of demand is expected to double (and you should be able to verify this through…
(ii) Demonstrate and discuss each of the following would have on demand or supply ofcoffee. Additionally, show how equilibrium price and quantity have changed.a. A better method of harvesting coffee beans is introduced.b. Medical researchers found that intake of more than two cups of coffee per daydrastically decreases risk of liver cancer.c. Currently, the price of coffee is ₹15 per cup above equilibrium.d. Consumer income falls because of a recession and coffee is considered anormal good.e. . Protesting liberal milk powder import policy, farmers dump millions of litresof milk, causing milk prices to rise.
23. Using the production possibilities table below, please answer the following question: Type of Production Schools Missiles Type of Production Schools Missiles A 0 16 A 0 16 Production Alternatives If the economy were at point D, what would be the opportunity cost of building 4 more schools? 24. Using the production possibilities table below, please answer the following question: B 4 15 B 4 15 Production Alternatives C 8 12 с 8 12 D 12 7 E 16 0 D 12 7 If the economy were at point D, what would be the opportunity cost of building one more missile? Please show your calculation for full points. E 16 0
Question 1 The table shows market data for mobile phone kits. The original equilibrium price is GHC 23. Price GHO Quantity Quantity New demanded supplied per month per (000) 56 month (000) 7 8 9 8 7 25 24 23 22 21 9 As a result of a successful advertising campaign, demand increased by 3000 mobile phone kits at all prices. At the same time production costs fell leading to an increase in supply of 1000 mobile phone]kits at all prices. la) Calculate the new equilibrium price and quantity following the successful advertising campaign and fall in production costs. New quantity quantity demanded supplied 6 5 per month per month (000) (000) 1b) Consider the retail market for petrol. Do you believe that this market operates under conditions of imperfect competition? Explain with reasons for your answers. 1c) Suppose a producer sells 1,000 units of a product at GHC5 per unit one year, 2,000 units at GHC8 the next year, and 3,000 units at GHC10 the third year. Is this evidence that the law of…
4. Which of the following statements is (are) correct? (x) When quantity supplied responds very little to changes in price, supply is said to be inelastic. (y) If the quantity supplied changes substantially when the price of the good changes a small amount, then the coefficient of price elasticity of supply is a number larger than one and supply is elastic. (z) Holding all else constant, if a paper manufacturer increases production by 12 percent when the market price of paper increases by 15 percent, then the price elasticity of supply must be inelastic since the coefficient of price elasticity of supply is equal to 0.80. A. (x), (y) and (z) C. В. (x) and (y) only (x) and (z) only E. (x) only D. (y) and (z) only
99257#/9999257/10/-1 Macmillan Learning $1.50 Stacked 3 4 --$1:50- Quantity 33.2 vered by desmas Quantity Alter the graph in order to explore the change in total revenue in response to a price change with different demand elasticities. Notice that once price goes below $1.50, total revenue decreases in both cases of demand elasticity. a. What important insights does this illustrate? Elasticity measures responsiveness in percent change, which is different than slope. Elasticity is unitary along a linear demand curve. Elasticity is constant along a linear demand curve. With linear demand curves, elasticity will eventually change as you move along a curve. b. What can be inferred about the elasticity of both curves once price goes below $1.50? O Demand is elastic for the steeper curve and inelastic for the flatter curve. O Demand is elastic for both curves once price drops below $1.50. There is not enough information to make a determination. O Demand is inelastic for both curves once…
Equilibrium Question 1 Sunny Ltd has produced a new DVD player for the UK market. The following demand and supply data is the result of recent market research. PRICE ($) DEMAND SUPPLY 200 100 220 180 120 200 160 140 180 140 160 160 120 180 140 100 200 120 80 220 100 1. Plot demand and supply curves 2. What is the equilibrium price and quantity? 3. Illustrate and explain what would happen if Sunny charged $100 for the DVD players? 4. illustrate and explain the effect of Sunny charging $160?

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS