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Supply and demand a) You produce garden chairs in Switzerland, and you know the local market. Supply and demand for Swiss garden chairs can be quantified by equations P= 30 + 0. 5Q and P = 60-Q. 1Q stands for 10,000 chairs. You sell the number of chairs where your own marginal costs correspond to the market price At what price have vou sold the garden chairs so far and bow mnuch bave VOu sold

Supply and demand a) You produce garden chairs in Switzerland, and you know the local market. Supply and demand for Swiss garden chairs can be quantified by equations P= 30 + 0. 5Q and P = 60-Q. 1Q stands for 10,000 chairs. You sell the number of chairs where your own marginal costs correspond to the market price At what price have vou sold the garden chairs so far and bow mnuch bave VOu sold

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Supply and demand a) You produce garden chairs in Switzerland, and you know the local market. Supply and demand for Swiss garden chairs can be quantified by equations P= 30 + 0. 5Q and P = 60-Q. 1 Q stands for 10,000 chairs. You sell the number of chairs where your own marginal costs correspond to the market price. At what price have you sold the garden chairs so far and how much have you sold each year? b) You are a tinkerer and invent a new method that massively reduces your production costs per chair. Therefore, you can now offer each chair 15 CHF cheaper or move your offer curve down by 15 CHF. How many chairs do you sell now and at what unit price? c) It gets even better. Your garden chairs are now also purchased for conservatories, parlors, kitchens, etc. The image of your garden chair has become a designer chair. They make demand estimates and find that an additional price per chair of 30 CHF can be charged for each possible sale (demand shifts upwards by 30 CHF). How many chairs can you sell now thanks to the innovation (sub-question b) and the increase in demand and at what price?
Transcribed Image Text:Supply and demand a) You produce garden chairs in Switzerland, and you know the local market. Supply and demand for Swiss garden chairs can be quantified by equations P= 30 + 0. 5Q and P = 60-Q. 1 Q stands for 10,000 chairs. You sell the number of chairs where your own marginal costs correspond to the market price. At what price have you sold the garden chairs so far and how much have you sold each year? b) You are a tinkerer and invent a new method that massively reduces your production costs per chair. Therefore, you can now offer each chair 15 CHF cheaper or move your offer curve down by 15 CHF. How many chairs do you sell now and at what unit price? c) It gets even better. Your garden chairs are now also purchased for conservatories, parlors, kitchens, etc. The image of your garden chair has become a designer chair. They make demand estimates and find that an additional price per chair of 30 CHF can be charged for each possible sale (demand shifts upwards by 30 CHF). How many chairs can you sell now thanks to the innovation (sub-question b) and the increase in demand and at what price?
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