6. The Market for Chicken Meat in Davao City a. Fill in the missing algebraic signs (+ or-) of the demand and supply equations for chicken meat below according to the hypothesized direction of relationships. where: Q= quantity of chicken meat in kilograms, per day Pc = price of chicken meat (in pesos per kilogram) 1= income of average consumer (in pesos per day) P=price of beef (in pesos per kilogram) W=wage rate paid in the poultry business (in pesos per day) P,= price of mixed feeds (in pesos per kilogram) Demand: Q" = 20 1.5P_0.81_ _0.5 W. 0.6 P. Supply: Q = - 20_ 4.5Pc 3 Pr b. Suppose the other variable affecting the demand for and supply of chicken meat have the following values: I= P300/day; Pa P100/kg; W = P100/day; Pr = P10/kg i. Derive the simple demand and supply equations where Q is a function of P. ii. Solve for the equilibrium price and quantity in the market. i. Suppose the government imposes a price ceiling of P50/kg: 1. What happens to the market for chicken? 2. Indicate the magnitude of the deviation of quantities demanded and supplied. 3. What can the government do in such a situation? iv. Describe what will happen to the market and solve for the equilibrium price and quantity under each of following assumptions: 1. The income of consumers increase by 50%, ceteris paribus. 2. The price of beef falls to P 90/day, ceteris paribus. 3. The wage rate in the poultry business is raised by 20%, ceteris paribus. 4. The price of feeds falls to P8/kg, ceteris paribus.
6. The Market for Chicken Meat in Davao City a. Fill in the missing algebraic signs (+ or-) of the demand and supply equations for chicken meat below according to the hypothesized direction of relationships. where: Q= quantity of chicken meat in kilograms, per day Pc = price of chicken meat (in pesos per kilogram) 1= income of average consumer (in pesos per day) P=price of beef (in pesos per kilogram) W=wage rate paid in the poultry business (in pesos per day) P,= price of mixed feeds (in pesos per kilogram) Demand: Q" = 20 1.5P_0.81_ _0.5 W. 0.6 P. Supply: Q = - 20_ 4.5Pc 3 Pr b. Suppose the other variable affecting the demand for and supply of chicken meat have the following values: I= P300/day; Pa P100/kg; W = P100/day; Pr = P10/kg i. Derive the simple demand and supply equations where Q is a function of P. ii. Solve for the equilibrium price and quantity in the market. i. Suppose the government imposes a price ceiling of P50/kg: 1. What happens to the market for chicken? 2. Indicate the magnitude of the deviation of quantities demanded and supplied. 3. What can the government do in such a situation? iv. Describe what will happen to the market and solve for the equilibrium price and quantity under each of following assumptions: 1. The income of consumers increase by 50%, ceteris paribus. 2. The price of beef falls to P 90/day, ceteris paribus. 3. The wage rate in the poultry business is raised by 20%, ceteris paribus. 4. The price of feeds falls to P8/kg, ceteris paribus.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:6. The Market for Chicken Meat in Davao City
a. Fill in the missing algebraic signs ( + or -) of the demand and supply equations for chicken meat below
according to the hypothesized direction of relationships.
where:
Q= quantity of chicken meat in kilograms, per day
Pc = price of chicken meat (in pesos per kilogram)
1= income of average consumer (in pesos per day)
P=price of beef (in pesos per kilogram)
W=wage rate paid in the poultry business (in pesos per day)
P,= price of mixed feeds (in pesos per kilogram)
Demand: Q = 20.
Supply: Q = - 20
1.5P
4.5Pc
_0.8 I
_0.5 W
_0.6 Ps
3 PF
b. Suppose the other variable affecting the demand for and supply of chicken meat have the following
values: I = P300/day; Pa = P100/kg; W = P100/day; Pr = P10/kg
i. Derive the simple demand and supply equations where Q is a function of P.
ii. Solve for the equilibrium price and quantity in the market.
iii. Suppose the government imposes a price ceiling of P50/kg:
1. What happens to the market for chicken?
2. Indicate the magnitude of the deviation of quantities demanded and supplied.
3. What can the government do in such a situation?
iv. Describe what will happen to the market and solve for the equilibrium price and quantity
under each of following assumptions:
1. The income of consumers increase by 50%, ceteris paribus.
2. The price of beef falls to P 90/day, ceteris paribus.
3. The wage rate in the poultry business is raised by 20%, ceteris paribus.
4. The price of feeds falls to P8/kg, ceteris paribus.
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