Q10): Consider the market for a natural resource, where the price is initially $12,000 per tonand 6,000 tons are supplied.Suppose the price of the resource falls to $10,000 per ton, at which price the market supplies 4,000tons.What is the price elasticity of supply between these prices? Also, determine whether the supply iselastic, inelastic, or unit elastic? Justify your answer.

To find the price elasticity of supply between the two prices and determine whether the supply is…

Answered: Q10): Consider the market for a natural…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Problem 4: Suppose that when the price of dishwashing liquid decreases from Php 230 to Php 185, quantity supplied decreases from 250 to 210 unit. Using the mid-point elasticity approach, calculate price elasticity of supply.
3. The supply and demand for product A at different price levels are given. Price Demand Supply 34 6 28 4 22 6. 12 16 8 15 10 10 18 4 12 a) Find the demand function (Q=a-bP) and the supply function (Q=c+dP). Define the equilibrium price and quantity for this product. b) Calculate the price elasticity of demand as the price increases from $9 to $12 (use the midpoint method). c) Calculate the price elasticity of supply as the price decreases from $12 to $9 (use the midpoint method).
Suppose that the percentage change in supply is 15%, the price elasticity of supply is 3, and the percentage change in the equilibrium price is 3%. What is the price elasticity of demand? A) 3 B) 0 C) 1 D) 2 Suppose that the percentage change in supply is 25%, the price elasticity of demand is 1, and the percentage change in the equilibrium price is 5%. What is the price elasticity of supply? A) 2 B) 5 C) 4 D) 0 Suppose that the percentage change in demand is 16%, the price elasticity of demand is 1, and the percentage change in the equilibrium price is 4%. What is the price elasticity of supply? A) 2 B) 1 C) 3 D) 0
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The short-run demand and supply elasticities for crude oil are -0.076 and 0.088, respectively. The current price per barrel is $30 and the short-run equilibrium quantity is 23.84 million barrels per year. What will be the effects on the market price and quantity if the government decides to purchase (and store away) an additional 2 million barrels of oil? Assume that the additional consumption of oil by the government results in a parallel shift of the supply curve to the left by 2 million barrels per day What could be the economic rationale for buying and storing oil?
2) Imagine that you have started a firm and own the patent for a new technology that allows for the 3D printing of food. This is a huge nutritional breakthrough since the printer can provide nutritional food for years. Since you are the first with this technology and have patented it, your firm is the only firm that can produce and sell this type of printer. There are no close substitutes for your printer and your data indicates weekly demand is given by the equation Qa = 9000 - 2P. a) Your production analysis indicates that your firm's cost function is C(Q) = F +Q². Illustrate the market, 2 showing the inverse demand curve, the MR curve and the MC curve. Then, compute and illustrate your firm's profit maximizing price and quantity of the printer. How low must the fixed cost be to ensure that the firm is making positive profits? Make sure to clearly label all relevant curves. Finally, what is the markup on the printer (measure markup in the following way: Price/MC)? b) Redraw the…
b
The demand for an economics textbook is given by: Q = 796 - 3p^2 Find the value of Q1 when demand is unit elastic and hence calculate the new price (rounded to two decimal positions) needed to increase Q by 100 units from the Q1 value. Note: Express the new price with two decimal positions (avoid intermediate roundings in the calculation process).
Given that the supply function of a good is P = Q² +2Q + 9. The demand function of the same item is P - aQ - b = 0 . Find the values of a and b if it is known that the market equilibrium price is 108 and that demand is unit elastic at P = 50.
What effect would each of the following factors have on elasticity of demand for resource A, which is used to produce product Z? Due to technological change, much less of resource A is used relative to resources B and C in the production process.
Suppose the demand equation is: Q = 80 - 0.75p. What is the price elasticity of demand if the price is $40 per unit and output is 50 units? The price elasticity of demand is . (Enter a numeric response using a real number rounded to two decimal places.) This means that if the price increases by 3%, the quantity demanded will V by %. (Enter a numeric response using a real number rounded to two decima. places.) Reacti tv MacBook Air 80 DII DD F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 ! @ #3 & 1 3 8 9. Q W E R T Y { A F J K C V M く tion command command option .. .. ど * CO つエ H
The short-run demand and supply elasticities for oil are -0.076 and 0.088, respectively. The current price per barrel is $30 and the short-run equilibrium quantity is 23.84 million barrels per year. 1. Derive the linear demand and supply equations.2. What will be the effects on the market price and quantity if the government decides to purchase (and store away) an additional 2 million barrels of oil? Assume that the additional consumption of oil by the government results in a parallel shift of the supply curve to the left by 2 million barrels per day.3. What could be the economic rationale for buying and storing oil?

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