if there is any diagram can you add it. Given the following demand and supply equations: QD = 10 - 0.8P + 5Y + A QS= -10 + P where Q = quantity (million units per month), P = price (€ per unit). Y = average monthly income (€000)and A monthly advertising expenditure (€000). Suppose average monthly income is €4,000 and monthly advertisingexpenditure is €50,000: (a) Find the market equilibrium price and quantity. (b) Find total welfare when the market is inequilibrium. (c) Find the price elasticity and income elasticities of demand and price elasticity of supply at equilibrium.Interpret your results. (d) What would be the effect of a price ceiling of €60? Explain. (e) Suppose a tax of €8 per unit isintroduced: (i) What is the effect on market price and quantity? Explain. (ii) What is the impact of the tax on total welfare?Explain. (iii) How is the incidence of the tax shared between the consumer and the supplier? Explain

The objective of the question is to analyze the market equilibrium, total welfare, price elasticity,…

Answered: if there is any diagram can you add it.…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The diagram to the right illustrates a hypothetical demand curve representing the relationship between price (in dollars per unit) and quantity (in 1,000s of units per unit of time). 100- 90- Total revenue is $ (Enter your response as an integer.) 80- 70- 60 60- 50- 40- 30- 20- 10- D 30 0- 10 20 30 40 50 60 70 80 90 100 Quantity (1,000s of units per unit of time) Price (dollars per unit)
Consider two markets: the market for motorcycles and the market for pancakes. The initial equilibrium for both markets is the same, the equilibrium price is $4.50, and the equilibrium quantity is 29.0. When the price is $7.75, the quantity supplied of motorcycles is 65.0 and the quantity supplied of pancakes is 103.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for pancakes. Please round to two decimal places.
Suppose that for your demand schedule for pizza is as follows:a)Use the midpoint method to calculate your price elasticity of demand as the price of pizza increases from$8 to $10 if(i)your income is $20,000(ii)your income is $24,000.b)Calculate your income elasticity of demand as your income increases from$20,000 to$24,000(i)the price is $12 and (ii) the price is $16
Question #2 Consider the following demand function for frozen dinners where QD is the quantity of frozen dinners demanded per week, P is the price per frozen dinner, PF is the price per fast food meal, Y is the average yearly consumer income, and A is the number of advertisements for frozen dinners. Demand Function for Frozen Dinners: QD = 1,000 – 10P + 20PF – 0.01Y + A Suppose that a frozen dinner sells for $4, a fast food meal sells for $6, average yearly consumer income is $50,000, and that there are 20 advertisements for frozen dinners. Calculate and interpret the income elasticity of demand. Calculate and interpret the cross-price elasticity of demand with respect to fast food meals.
a) The demand function for a product is p = 60 3-9/15) where q is the number of units and p is the price of one unit. At what price will the demand be 15 units? How many units will be demanded if the price is $41.60?
The following table shows two demand schedules for a given style of men's shoe-that is, how many pairs per month will be demanded at various prices at Stromnord, a men's clothing store. $ Price $75 70 65 60 55 $ D1 Quantity Demanded 53 60 68 77 87 Suppose that Stromnord has exactly 65 pairs of this style of shoe in inventory at the start of the month of July and will not receive any more pairs of this style until at least August 1. Instructions: Enter your answers as a whole number. a. If demand is D₁, what is the lowest price that Stromnord can charge so that it will not run out of this model of shoe in the month of July? What if demand is D2? D2 Quantity Demanded 13. 15 18 22 27 b. If the price of shoes is set at $75 for both July and August and demand will be D2 in July and D₁ in August, how many pairs of shoes should Stromnord order if it wants to end the month of August with exactly zero pairs of shoes in its inventory? pair(s) How many pairs of shoes should it order if the price…
8. Substitutes, complements, or unrelated? You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gumdrops, frizzles, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of guppy gumdrops decreases by 8%, the quantity of frizzles sold decreases by 6% and the quantity of kipples sold increases by 8%. Your job is to use the cross-price elasticity between guppy gumdrops and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following…
The answer should be typed.
Price Elasticity of Demand, Midpoint Formula: E = percentage change in quantity demanded ÷ percentage change in price, in absolute value where, percentage change in quantity demanded = (Q2 − Q1) ÷ [(Q1 + Q2) ÷ 2] percentage change in price = (P2 − P1) ÷ [(P1 + P2) ÷ 2] Note that the denominator in each part uses the average quantity or the average price. Using the table, graph, and formula, compute E for a popcorn price increase from $0.15 to $0.20 per ounce. Instructions: Round your response to one decimal place. Q1 is20 and Q2 is 16
Congratulations! You have just landed your first job out of college as an economic analyst at the Bureau of Labor Statistics. Your starting salary is $55,000 per year; an increase of 250% per year over the salary you made at the local coffee shop. The corresponding table gives the percentage change in your purchases of each good after your income increases. Use this information to estimate your income elasticity of demand for each of the items.
The diagram to the right shows a hypothetical demand curve for apples. The slope of this curve is response rounded to two decimal places. Include minus sign if appropriate.) (Enter your Price (dollars per bushel) 100.00 90.00 80.00- 70.00- 60.00- 50.00 40.00 30.00 20.00- 10.00+ Demand Curve for Apples 0.00 0 10 20 30 40 50 60 70 80 90 100 Quantity (bushels per week)
For this question and the next few following, you should use the dataset below. Over the range from $4 to $6, Qd goes from 48 to 44. Using this range of prices and quantities, you should calculate the coefficient of price elasticity of demand. In the box labeled A1, the coefficient of price elasticity of demand is: 4 .22 2 .33

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