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…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

Consider the supply of nails shown in Figure 2. The initial supply of nails is S (in black), the initial price of a pound of nails is $12, and the initial quantity supply of nails is 40K pounds. Which of the following correctly describes the effect of an INCREASE in the supply of nails while the price of a pound of nails remains at $12? A) The supply curve shifts right to S' (in blue), and the quantity supply of nails remains at 40K pounds. B) The supply curve shifts right to S' (in blue), and the quantity supply of nails increases to 55K pounds. C) The supply curve remains at S (in black), and the quantity supply of nails remains at 40K pounds. D) The supply curve remains at S (in black), and the quantity supply increases to 55K pounds.
Consider the supply of nails shown in Figure 2. The initial supply of nails is S (in black), the initial price of a pound of nails is $12, and the initial quantity supply of nails is 40K pounds. Which of the following correctly describes the effect of a decrease in the price of a pound of nails from $12 to $5? A) The supply curve shifts left to S'' (in red), and the quantity supply of nails decreases to 25K pounds. B) The supply curve remains at S (in black), and the quantity supply of nails remains at 40K pounds. C) The supply curve remains at S (in black), and the quantity supply of nails decreases to 25K pounds. D) The supply curve shifts left to S'' (in red), and the quantity supply of nails remains at 40K pounds.
Wendy works at a hamburger restaurant that's typical for its overall market. She notices that lately both the equilibrium price and the equilibrium quantity of hamburgers has fallen. Wendy thinks this could have occurred because of one of two events that happened recently: First event: People don't like hamburgers as much as they used to. Second event: The price of the type of meat used to make these hamburgers has fallen. The overall effect on the market here (or at least the dominant change) comes from O the first event (demand shifting right) the second event (supply shifting left) the first event (demand shifting left) O the second event (supply shifting right)
Use supply and demand curves to show and explain how both the equilibrium price and quantity change in each case. a) The increasing adoption of over-the-top media streaming services lead to more people staying at home to watch movies rather than going to a movie theater. Show how this change in behavior affects the market for microwave popcorn. b) The severe winter storm in Texas agricultural regions caused a massive electricity generation failure and increased the costs of irrigation and energy. How would this affect the market for fruits and vegetables?
True or False: The law of supply states that as the price of a good or service increases, the quantity supplied by producers also increases, ceteris paribus.
Assume the demand curve for gasoline is downward sloping and the supply curve is upward sloping. Start by considering the gasoline market in 2020. Draw a graph that shows supply and demand analysis for gasoline in this city. Label the supply curve as S0; demand curve as D0; the equilibrium price as P0; and equilibrium quantity as Q0.
Find the equilibrium price and quantity for a product that has the following supply and demand curves, where p is the price in 100's of dollars and q is quantities in 1,000's of units demand: 1/3q + 1/3p - 4=0 Supply: q-p-2=0 If the product is currently priced at $400, what is the quantity supplied and the quantity demanded? Is there a surplus (More supplied than demanded) or a shortage (More demanded than supplied)
Once again, consider the market for avocados. Approximately 32 percent of the world's total production of avocados come from Southern California. Suppose that devastating wildfires destroy large swaths of California's avocado crop. Which of the following statements describes the effect the wildfires will have on the price and quantity (i.e., equilibrium price and equilibrium quantity) of avocados? The price will increase and the quantity will decrease. The price will decrease and the quantity will increase. Both the price and the quantity will decrease. Both the price and the quantity will increase
Assuming an increase in Demant and decrease in Supply, which of the following statements is TRUE? The price of the good will decrease. The quantity of the good will definitely decrease. The price of this good will definitely increase. There will be a permanent shortage of this good. The new equilibrium quantity may increase, decrease, or stay the same. A surplus of this good will result from these changes in Supply and Demand. What new equiLibrium quantity will result depends on the relative magnitude of the changes and the shapes of the Demand and Supply curves. We cannot determine what will happen to price.
Dairies make low-fat milk from full-cream milk. In the process of making low-fat milk, the dairies produce cream, which is made into ice cream. The graph shows the supply curve of low-fat milk. Suppose the price of cream rises. Draw a new supply curve that shows the effect of this event. Label the curve. 5.00- 4.00- 3.00- 2.00- 1.00- Price (dollars per quart) So Q Q 500 600 0.00- 200 300 400 Quantity (millions of quarts of low-fat milk per year) >>> Draw only the objects specified in the question.
Question 1 Consider a rice farmer planting two (2) types of rice, white and brown rice, concurrently in his rice field using the same resources and technology and harvesting them at the same time. Given that consumers like to mix both white and brown rice in their daily consumption, explain the effect on the white rice market when the price of brown rice increases. Support your answers with suitable white rice market diagrams. Consider a farmer that produces both white and brown rice. It is discovered that the demand for brown rice is relatively more inelastic compared to the demand for white rice. Initially the price of both white and brown rice is the same and the farmer produces the same quantity of white and brown rice. Now there is an improvement in agricultural technologies that affect both white and brown rice equally. Employ the demand and supply model to compare and contrast the effects on the equilibrium price and quantity of both white and brown rice…
Suppose the demand for organic bananas is given by the following equation: Qd = 10 - 1P where Qd is the quantity demanded per week of organic bananas, and P is the price of organic bananas. Suppose further that the supply of organic bananas is: Qs = 3 + 2P where Qs is the quantity supplied per week of organic bananas. What is the equilibrium market quantity of organic bananas? (Round your answer to 2 decimal places.)

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