Σ 3. 21 Pric 2. Unit 2 Progress Check FRQ 5. 2. 0 12 3 4 5 6 7 8 9 10 Quantity (millions of cases) Assume that sugar-based soft drinks are produced in a market shown on the graph above. Answer the following questions based on the information given in the graph. (a) To reduce the consumption of sugary soft drinks, suppose the government imposes a $2 per-unit sales tax on soft drinks. ) Will the price of soft drinks increase by the full amount of the sales tax? Explain. (1) Calculate the tax revenue the government can collect from the sale of soft drinks. Show your work. (iii) Will the consumer surplus increase, decrease, or stay the same after the tax? (iv) Calculate the deadweight loss created by the tax. Show your work. (b) Suppose that instead of imposing the per-unit sales tax, the government sets a price ceiling of $7. Identify the quantity of soft drinks that will be exchanged in the market as a result of the price ceiling. Explain. SUE esc ->

Σ 3. 21 Pric 2. Unit 2 Progress Check FRQ 5. 2. 0 12 3 4 5 6 7 8 9 10 Quantity (millions of cases) Assume that sugar-based soft drinks are produced in a market shown on the graph above. Answer the following questions based on the information given in the graph. (a) To reduce the consumption of sugary soft drinks, suppose the government imposes a $2 per-unit sales tax on soft drinks. ) Will the price of soft drinks increase by the full amount of the sales tax? Explain. (1) Calculate the tax revenue the government can collect from the sale of soft drinks. Show your work. (iii) Will the consumer surplus increase, decrease, or stay the same after the tax? (iv) Calculate the deadweight loss created by the tax. Show your work. (b) Suppose that instead of imposing the per-unit sales tax, the government sets a price ceiling of $7. Identify the quantity of soft drinks that will be exchanged in the market as a result of the price ceiling. Explain. SUE esc ->

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

4). APPLEWATCH (this concentrates on the mathematical part of the readings) (19 Points) a) This question is based on the impact of Lowering the Price of the Apple watch to $312 (note the original price of $349) a. Calculate the Point Price Elasticity of Demand for the Apple Watch (this requires you to show your work, calculate the number and explain the results of the Price Elasticity of Demand—in effect, is it elastic or inelastic and why-you should use the original price and the new price of $312)? (6 Points) b. Calculate new Total Revenue given this price reduction (begin by calculating what was initial total revenue when the price was $349). Note—use the demand function to calculate quantity demanded. (4 Points) c. Given a Variable Cost that is provided on Page 5 of the lecture Powerpoint (and not including the sunk/fixed costs) what is the profit maximizing output given a price of $349? (3 points) b) If Apple kept their price at $349 and Samsun reduced the price of their GearS to…
1. Assume that the equilibrium price is at $3 and equilibrium quantity is at 40 units of a product. Then, imagine that suddenly any of determinants of demand, other than the price of the product, caused demand to increase while, at the same time, one of determinants of supply, other than the price of the product, caused supply to decrease. TASK: First, draw the demand and supply graph to show the original equilibrium price at $3 and equilibrium quantity at 40 units. Second pick ONE specific DETERMINANT of DEMAND and ONE specific DETERMINANT of SUPPLY Third, show in the graph what it looked like if demand increased and supply decreased (select where you think that the new price and quantity would change to), what the new equilibrium price and equilibrium quantity would be, after both changes in demand and supply occurred. Fourth, in a couple of words, write down what would be YOUR new equilibrium price and equilibrium quantity. IThat is, tell us that the original equilibrium price…
5. Complete the sentences: A demand curve shows the quantity demanded at each possible holding the other factors that influence purchases. The quantity demanded is the amount of a good that consumers are willing to given price, holding the other factors that influence purchases. Changes in the quantity demanded in response to changes in price are A change in any relevant factor other than the price of the good causes at a
Exercise 2 Sketch the demand and supply curve to show the change in equilibrium price & quantitywhen: a) The income of an individual increases. (Draw for both normal & inferior goods)b) Assume that both the supply of bottled water and the demand for bottled water rise during the summer but that supply increases more rapidly than demand. c) If a popular celebrity involved in marketing a product.
Assume the demand curve for Pepsi passes through the following two points. Price per bottle of Pepsi $2.25 $1.75 Number of bottles of Pepsi sold 100,000 275,000 When plotting the demand curve (with price in dollars on the y-axis and quantity in bottles on the x-axis), when the y-value is $2.25, the x-value is the y-value is $1.75, the x-value is bottles. (Enter your responses as whole numbers.) bottles, and when
i will 10 upvotes.
A Define "supply." 9.( The definition of supply is very similar to that of demand. Supply is a schedule which shows the various amounts of a product sellers are at each price in a series of possible prices during a specified period, other things being equal. Supply portrays relationship between ( related either in the table or in the (graph). ) and ( ) to produce and offer for sale ) and ( ), they are (directly, inversely) S Describe and give a reason for the law of supply. The law of supply indicates that producers will produce and sell (more, less ) of their product at a high price than at a low price. This means that there is a positive, negative ) relationship between price and quantity supplied. The basic explanation is that, given product costs, a higher price means greater profits and thus more incentive for business to increase the quantity supplied.
2.2. Use a diagram to illustrate what will happen to the equilibrium price and quantity of a product if the demand for the product increases. Also mention three factors that can cause an increase in demand. (10)
"While the world's appetite for chocolate grows more voracious each year, cocoa farms around the globe are failing, under siege from fungal and viral diseases and insects... Researchers predict a shortfall in beans from the cacao tree, the raw material from which chocolate is made, in as little as five to ten years." 1) using the graph, describe the effect of such events on the demand and supply curves and also label the lines you drew properly. 2.) also identify the new point of equilibrium. label it properly.
Chapter 3 Review Quantity Figure 3-1 6. Refer to Figure 3-1. Using the graph above and beginning on D1, a shift to D2 would indicate a (n): A. increase in quantity demanded. B. decrease in quantity demanded. C. increase in demand. D. decrease in demand. Price
5. Assume a product's demand is Price = -(3/4) * Quantity + 12 [or P = -(3/4)*Q+12]. Fill in the demand schedule (i.e., pick quantities [0, 4, 8, 12 etc.] and find the associated prices) and plot demand on the graph (also label graph axes with the traditional measures for demand graphs) Page 3 Quantity Price 13 12 11 10 9- 8 7 6 5 4 3 2 1 0 0 2 4 6 8 10 12 14 16 18 20 22
1a) Graph the demand curve for a product given by the equation P=16-0.5Q. 1b) Which of the following statements is accurate? a. The max willingness to pay for the 10 unit is $6. b. If the price is $8, the quantity demanded is 8 units. c. The max willingness to pay for the 8th unit is $12. d. If the price is $6, the quantity demanded is 18 units. e. None of the above.