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Given: 6x+10y-42=0, is it a
a.) supply function
b.) demand function
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- 5. If the price elasticity of demand for a good is 1.5, we would say that its demand is a)inelastic b)elastic c)increasing d)normalWhich of the following statements best illustrates the concept of derived demand? An increase in the price of gasoline leads to an increase in the demand for small cars. 111 An increase in the wages of autoworkers leads to an increase in the demand for robots in automobile factories. O An auto firm decides to supply more minivans when there is a decrease in the demand for station wagons. An automobile firm faces an increase in the demand for cars it supplies to the market, which leads to an increase in the demand for autoworkers.The following graph shows the demand for a good. (? W 280--+ 140- Y 100-- 40- --L_L Demand 15 QUANTITY (Units) For each of the regions listed in the following table, use the midpoint method to identify if the demand for this good is elastic, (approximately) unit elastic, or inelastic. Region Elastic Inelastic Unit Elastic Between W and X Between Y and Z Between X and Y PRICE (Dollars per unit)
- 1. Suppose you are given the following information about the demand for vinyl records: P = 60 – 1.5QD a) Suppose the price increases from $15 to $30, what is the arc elasticity of demand? b) Suppose the price decreases from $30 to $ 15, what is the arc elasticity of demand? c) How does you answer from part (a) and (b) compare with the point elasticity of demand when price is $15? What about when price is $30?18) Suppose that you know that the price elasticity of demand is 1.3. If we increase the price of the this product, then the total revenue will (select one): increase remain unchanged decreaseThe price elasticity of demand for a good is calculated as 1.36. From this elasticityco-efficient, we can tell that:(2)(1) The good is not a necessity;(2) The good has many close substitutes;(3) Producers can increase total revenue by decreasing the price of the good;(4) Statements 1, 2 and 3 are all correct.
- 1. Consider the market for Widgets. Suppose that the equation for the supply curve is: Qs = 1,000P – 10,000, and the equation for the demand curve is: Qa = 50,000 – 2,000P. It turns out that the equilibrium price is 20, while the equilibrium quantity is 10,000. a. Use a 10% increase in quantity to estimate (crudely) both the elasticity of supply and the elasticity of demand at the equilibrium quantity. i) Categorize supply and demand as elastic or inelastic at the equilibrium quantity. ii) Is supply or demand relatively more inelastic at the equilibrium quantity? b. If the government enacted a tax of $3, the loss in consumer surplus would be 9,000, while the loss in producer surplus would be 18,000 (see Homework 2, question #2.) Compare this information to your answer to part (a). Explain. c. Now estimate (crudely) the elasticity of demand at a quantity of 11,000 by decreasing quantity by 1,000. Compare your estimate of elasticity to the estimate in part (a). Comment.ADVANCED ANALYSIS Assume that demand for a commodity is represented by the equation P=80−2Qd.P=80−2Qd. Supply is represented by the equation P=−20+2Qs,P=−20+2Qs, where Qd and Qs are quantity demanded and quantity supplied, respectively, and P is price.Instructions: Round your answer for price to 2 decimal places and enter your answer for quantity as a whole number. Using the equilibrium condition Qs = Qd, solve the equations to determine equilibrium price and equilibrium quantity.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
- QUESTION 7 The demand for rubber erasers consists of two components. The first component is the demand for rubber erasers by art students. This demand is given by QA = 19,500 - 325P. The second component is the demand for rubber erasers by all others. This demand is given by Qo = 32,000 - 2,000P. (a) What is the total quantity demanded of rubber erasers if the price of an eraser is: (i) $10 (ii) $15 (iii) $20 (iv) $30 (v) $70 (b) Assume that the supply of rubber erasers is given by Qs = 14,000+ 175P. (i) Find the equilibrium price and the equilibrium quantity. (ii) Calculate the total consumer surplus. [Hint: It may be easier if you calculate the consumer surplus for art students and the consumer surplus for all others separately, and then add them up.] (c) Assume that the supply of rubber erasers is given by Qs = 8,390 + 180P. Find the equilibrium price and the equilibrium quantity. 10 (DC) EN510The demand and supply equations for pepperoni pizzas in Collegetown are given by the following equations: Supply Equation Qs = -4 + P Demand Equation Qd = 28 - P What is the equilibrium quantity of pepperoni pizzas in Collegetown? A. 10 B. 12 C. 14 D. 169. Shifts in supply or demand II The following graph shows the market for hot dogs in Detroit, where there are over 1,000 hot dog stands at any given moment. Suppose the price of sausage casing, a major ingredient in hot dogs, suddenly increases. Show the effect of this change on the market for hot dogs by shifting one or both of the curves on the following graph, holding all else constant. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Supply Demand Supply Demand QUANTITY (Hot dogs) PRICE (Dollars per hot dog)
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