A farmer who sells pineapples is looking to sell his crop for $1 a pound. He knowsthe equilibrium price is $1.20 a pound but wants to sell his bananas below this priceanyways. Using the law of supply and demand, what will happen to his profits?While he will sell more pineapples, his profits per pound will be less than theequilibrium price, meaning there is no incentive to drop the priceHis profits will rise because he will sell more pineapples but for a lower priceHis profits will fall because he will not sell very many pineapples due to othersuppliers selling the same product for more, thus meaning higher qualityHis profits will be unaffected because the equilibrium price has no effect on thequantity he sells

When dealing with market hypothesis, it can be said that the law of demand and supply helps the…

Answered: A farmer who sells pineapples is…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter5: Markets In Motion And Price Controls

Section: Chapter Questions

Problem 10P

See similar textbooks

Similar questions

Suppose that today the market for homes is in equilibrium. Tomorrow both the supply and demand curves for homes will shift to the right. As a result, the equilibrium price . and the equilibrium quantity . O will fall; will fall O will fall; will rise O cannot be determine; will fall O cannot be determined; will rise
What effect will each of the following have on the supply of auto tires? Microeconomics chapter 3 Supply is a schedule or curve showing the amounts of a productthat producers are willing to offer in the market at each possibleprice during a specific period. The law of supply states that otherthings equal, producers will offer more of a product at a high pricethan at a low price. Thus, the relationship between price and quantity supplied is positive or direct, and supply is graphed as anupsloping curve.The market supply curve is the horizontal summation of thesupply curves of the individual producers of the product.Changes in one or more of the determinants of supply (resource prices, production techniques, taxes or subsidies, the pricesof other goods, producer expectations, or the number of sellers inthe market) shift the supply curve of a product. A shift to the rightis an increase in supply; a shift to the left is a decrease in supply. Incontrast, a change in the price of the…
The price of cereal, a complement good, has decreased. At the same time, a new and improved pasteurization process makes milk production more efficient. Given these two effects, what can we say about the equilibrium price and quantity of milk? O Equilibrium quantity will increase; the effect on price is ambiguous. Equilibrium price will increase; the effect on quantity is ambiguous. O Equilibrium price will decrease; the effect on quantity is ambiguous. O Equilibrium quantity will decrease, equilibrium price will increase.
What effect will each of the following have on the supply of auto tires? Microeconomics chapter 3 Supply is a schedule or curve showing the amounts of a productthat producers are willing to offer in the market at each possibleprice during a specific period. The law of supply states that otherthings equal, producers will offer more of a product at a high pricethan at a low price. Thus, the relationship between price and quantity supplied is positive or direct, and supply is graphed as anupsloping curve.The market supply curve is the horizontal summation of thesupply curves of the individual producers of the product.Changes in one or more of the determinants of supply (resource prices, production techniques, taxes or subsidies, the pricesof other goods, producer expectations, or the number of sellers inthe market) shift the supply curve of a product. A shift to the rightis an increase in supply; a shift to the left is a decrease in supply. Incontrast, a change in the price of the…
Several advertisements announce that the price of hand sanitizer will be decreasing next month. At the same time, the price of rubbing alcohol, an ingredient used to make hand sanitizer, has increased. Given these two effects, what can we say about the current equilibrium price and quantity of hand sanitizer? O Equilibrium price will decrease; the effect on quantity is ambiguous. Equilibrium price will increase, equilibrium quantity will decrease. O Equilibrium quantity will decrease; the effect on price is ambiguous. O Equilibrium quantity will increase; the effect on price is ambiguous.
Suppose that the demand and supply of liter of petrol are given in table 1 as per attachment What is the equilibrium price and quantity of petrol? Use a graph paper to draw a demand curve and supply curve based on the table above. Now suppose that a political crisis in the Middle East lead to a decrease in the supply of petrol by 8 liter per day at every price. Show the change in the graph paper and show the new equilibrium position. What is the new equilibrium price of petrol? What is the new equilibrium quantity of petrol? In order t o help the consumer, the government imposes a price control of RM0.60 per liter: Give the name of this price control. How much petrol will be demanded by consumer at this price?. How much petrol will be offered for sale by…
true or false - explain in short be supported with an economic model. If the demand for and supply of a product both increases, the equilibrium quantity of the product must also increase. If the demand for a product decreases and the supply of the product increases, the equilibrium price of the product may increase or decrease, depending on whether supply or demand has shifted more. Assume that there is a fixed supply in the market. A higher price will result from a change in demand brought about by a rise in income.
Consider the market for gasoline that is initially in equilibrium. Suppose that the Middle East, a major supplier of petroleum used to produce gasoline, erupts into war. At the same time suppose that the price of electric vehicles falls. Given these changes and holding everything else constant, what happens to the equilibrium price and quantity in the market for gasoline relative to the initial equilibrium price and quantity in the market a. The equilibrium price may increase, decrease or remain the same while the equilibrium quantity will decrease b. The equilibrium price may increase, decrease or remain the same while the equilibrium quantity willincrease c. The equilibrium price will increase while the equilibrium quantity may increase, decrease or remain the same d. The equilibrium price will decrease while the equilibrium quantity may increase, decrease or remain the sam
The market demand for productXis given by: \[ Q_{d}=6-1 / 2 P \text { or } P d=12-2 Q \] The market supply for goodXis given by: \[ Q_{s}=-14+2 P \text { or } P s=7+1 / 2 Q \] whereP=price per unit andQis number of units. Draw a supply-and-demand graph with these curves. 1.) Using the line drawing tool, draw the supply and demand curves. Properly label your lines. 2.) Using the point drawing tool, plot the equilibrium point. Label your point 'E'. Note: Carefully follow the instructions above and only draw the required objects. The equilibrium price is$and the equilibrium quantity is unit(s). (Enter your responses as integers.) A per-unit excise tax is imposed on suppliers of productX, and the market supply with the tax is now given by: \[ Q_{s}=-19+2 P \text { or } P s=9.50+1 / 2 Q \] Using the graph on the right, show this supply curve. 1.) Using the line drawing tool, draw the new supply curve. Label your line 'S1+tax'.1. Note: Carefully follow the instructions above and only draw…
Suppose the supply curve for open-heart surgery is vertical at a hospital for heart conditions. If the demand for open-heart surgeries increases, what would happen to the equilibrium price of open-heart surgery O The equilibrium price will increase due to an increase in quantity demanded O The equilibrium price will decrease due to a decrease in supply and fixed demand O The equilibrium price will increase due to an increase in demand and fixed supply O The equilibrium price will decrease due to an increase in supply and fixed demand
Assuming normally shaped demand and supply curves, which of the following events would possibly result in an increase in the equilibrium price and an indeterminate effect on the equilibrium quantity O An increase In demand for the product O An increase in demand for the product combined with a decrease in supply for the product. O A decrease in supply for the product O A decrease in demand for the product combined with a decrease in supply for the product
Respond to the following matching statements with regard to the definition of supply. Match 1: The claim that other things being equal, the quantity supplied of a good increase when the price of that good rises. This matches the Law of Supply. Match 2: A graphical object showing the relationship between the price of a good and the amount that sellers are willing and able to supply at various prices. This matches the Supply curve. O Both matches are false O Match 2 is correct and Match 1 is false. O Both matches are correct. O Match 1 is correct and Match 2 is false. Next 1 Previous

SEE MORE QUESTIONS

Recommended textbooks for you

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Macroeconomics

Economics

ISBN:

9781337617390

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Macroeconomics

Economics

ISBN:

9781337617390

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Brief Principles of Macroeconomics (MindTap Cours…

Economics

ISBN:

9781337091985

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS