Problem 1: American Company is interested in obtaining quick estimates of the supply and demand curves for coal. The firm's research department informs you that the elasticity of supply is approximatively 1.7, the elasticity of demand is approximatively -0.85, and the current price and quantity are $41 and 1,206 respectively. Price is measured in dollars per ton, quantity the number of tons per week. a. Find the supply and demand equations b. Calculate the new demand curve if the demand shifted by + 5%. c. If the government refused to let Americans raise the price when demand increased in (b) above, what shortage is created? d. Show the shortage in a graph. Label your graph.

Problem 1: American Company is interested in obtaining quick estimates of the supply and demand curves for coal. The firm's research department informs you that the elasticity of supply is approximatively 1.7, the elasticity of demand is approximatively -0.85, and the current price and quantity are $41 and 1,206 respectively. Price is measured in dollars per ton, quantity the number of tons per week. a. Find the supply and demand equations b. Calculate the new demand curve if the demand shifted by + 5%. c. If the government refused to let Americans raise the price when demand increased in (b) above, what shortage is created? d. Show the shortage in a graph. Label your graph.

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

Problem 1 A lash adjuster keeps the pressure constant on engine valves, increasing automobile engines' fuel efficiency. The relationship between price (p) and monthly demand (D) for lash adjusters made by the Wicks Company is given by this equation: D=(2,000-p)/0.10. 6 a) What is the demand (D) when total revenue is maximized? b) What important data are needed if maximum profit is desired? & 7 IAA fg 8 DII myhp np f10 DDI 9 fi Po 112 prt sc
-0.03 The short-term demand for crude oil in Country A in 2008 can be approximated by q = f(p) = 2,000,569p where p represents the price of crude oil in dollars per barrel a represents the per capita consumption of crude oil. Calculate and interpret the elasticity of demand when the price is $76 per barrel. The elasticity of demand for oil is. (Type an integer or a decimal.) What is the elasticity of demand for oil when the the price is $76 per barrel? 1 (Type an integer or a decimal.) Interpret the elasticity of demand. Choose the correct answer below. O A. The demand is elastic, so as price increases, revenue decreases. O B. The demand is elastic, so as price increases, revenue increases. OC. The demand is inelastic, so as price increases, revenue increases. OD. The demand is inelastic, so as price increases, revenue decreases.
The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 97e° -3p²/2, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a) Determine the price elasticity of demand E when the retail price is set at ¥ 400. E = X Interpret your answer. The demand is going down ✔✔✔ by X% per 1% increase in price at that price level. Thus, large price decrease ✓ (b) At what price will revenue be a maximum? (Round your answer to the nearest integer.) X yen (c) Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.) paint-by-number sets per month is advised.
Question 3 Assume the ZRA decides to impose a new tax on imported vehicles priced above K200, 0 00. The new tax calls for a 15% tax on the higher-priced vehicles. However, the new tax al so causes the demand for vehicles to be cut in half from 1000 to 500 to compensate. Th is massive drop in demand has caused the supplier to cut back on supply from 1500 to 1000. Find a) The elasticity of supply and demand. b) If the tax incidence falls more on the supplier or the consumer (Calculate both the consumer and supplier tax burdens).
PRICE (Dollars per unit) 100 90 80 70 60 50 40 30 20 10 0 0 Statement H 10 J K B A C +D + E K J H Đ 20 30 40 50 60 70 80 90 100 QUANTITY (Units) Using the graph, complete the table that follows by indicating whether each statement is true or false. (Hint: You can display the coordinates by clicking on the points.) Curve KK is less elastic between points A and C than curve JJ is between points A and D. Between points A and B, curve II is perfectly inelastic. Between points A and C, curve KK is elastic. True O O False O O
When the price of candy bars increased from $0.45 to $0.55, the quantity demanded changed from 21,000 per day to 19,000 per day. In this price range, the price elasticity of demand coefficient (based on the midpoint formula) for candy bars is A) -1. B) -0.18. (C) -2. D -0.5.
1. The marginal price ?? ?? at ? units of demand per week is proportional to the price p. There is no weekly demand at a price of $1000 per unit, that is ?(0) = 1000. There is a weekly demand of 10 units at price of $367.88 per unit, ?(10) = 367.88. (A) Find the price-demand equation. (B) At a demand of 20 units per week, what is the price? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
When sold for $790.00, a certain desktop has an annual supply of 129.5 million computers and an annual demand of 155.5 million computers. When the price increases to $865.00, the annual supply increases to 147.5 million computers, and the demand drops to 134.5 million computers. NOTE: Round slope and vertical intercept to 4 decimal places and use those rounded values to the end. (a) Assuming that the supply and demand equations are linear, find the supply and demand equations. Supply Equation p = Demand Equation p = esc (Note: The equations should be in the form p = mq + b where p denotes the price (in dollars) and q denotes the quantity (in billions). The slope and y-intercept should be accurate to 4 decimal places). (b) Find the Equilibrium price and quantity. Equilibrium price p = Equilibrium quantity q = 9- F2 A (Note: The equilibrium price should be accurate to 2 decimal places and quantity should be rounded to the nearest whole number, and the equilibrium price should include a…
-0.06 The short-term demand for crude oil in Country A in 2008 can be approximated by q = f(p) = 1,952,082p where P represents the price of crude oil in dollars per barrel and q represents the per capita consumption of crude oil. Calculate and interpret the elasticity of demand when the price is $62 per barrel. The elasticity of demand for oil is (Type an integer or a decimal.)
Suppose the demand (in thousands) for a toaster is given by 100p-2, where p is the price in dollars charged for the toaster.a. If the variable cost of producing a toaster is $10,what price maximizes profit? b. The elasticity of demand is defined as the percentage change in demand created by a 1% change in price. Using a data table, show that the demand for toasters has constant elasticity, that is, the elasticity doesn’t depend on the price. Would this be true if the demand for toasters were linear in price?