OCHESTER 1. (12 points) Supply and Demand for Riesling The Finger Lakes region of New York State is known for its Rieslings. The demand function for bottles of wine from this region (in 100,000s) has two variables average annual income of purchasers. The functional form is: Qd=-2Pd-5+0.0011, where the price of wine and the Qd is quantity sold, Pd is the price of one bottle of wine, and I is equal to average income. Assume average annual income today is $30,000. A) (3 points) Calculate and plot the demand curve. B) (3 points) Calculate and plot the demand curve for I = $35,000 on the same graph as used in part a. == C) (6 points) Now assume a supply curve, Qs = 25P, - 175. Plot the supply curve on the same graph. Compute the equilibrium prices and quantities for the two demand curves.
OCHESTER 1. (12 points) Supply and Demand for Riesling The Finger Lakes region of New York State is known for its Rieslings. The demand function for bottles of wine from this region (in 100,000s) has two variables average annual income of purchasers. The functional form is: Qd=-2Pd-5+0.0011, where the price of wine and the Qd is quantity sold, Pd is the price of one bottle of wine, and I is equal to average income. Assume average annual income today is $30,000. A) (3 points) Calculate and plot the demand curve. B) (3 points) Calculate and plot the demand curve for I = $35,000 on the same graph as used in part a. == C) (6 points) Now assume a supply curve, Qs = 25P, - 175. Plot the supply curve on the same graph. Compute the equilibrium prices and quantities for the two demand curves.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:OCHESTER
1. (12 points) Supply and Demand for Riesling
The Finger Lakes region of New York State is known for its Rieslings. The demand function
for bottles of wine from this region (in 100,000s) has two variables
average annual income of purchasers. The functional form is: Qd=-2Pd-5+0.0011, where
the price of wine and the
Qd is quantity sold, Pd is the price of one bottle of wine, and I is equal to average income.
Assume average annual income today is $30,000.
A) (3 points) Calculate and plot the demand curve.
B) (3 points) Calculate and plot the demand curve for I = $35,000 on the same graph as
used in part a.
==
C) (6 points) Now assume a supply curve, Qs = 25P, - 175. Plot the supply curve on the
same graph. Compute the equilibrium prices and quantities for the two demand curves.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 3 images
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education