Suppose that the jackfruit industry is initially operating in long-run equilibrium at a price level of $5 per pound of jackfruit and quantity of 75 millionpounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as jackfruit could decrease yourexpected lifespan by 5 years.The publication is expected to cause consumers to demandjackfruit at every price. In the short run, firms will respond byShift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication.211098SupplyDemand00+153045 60 75 90 105 120 135 150QUANTITY (Millions of pounds)In the long run, some firms will respond by+ 1 }DemandSupplyuntilShift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the publication and the new long-run equilibrium after firms and consumers finish adjusting to the news.21109SupplyDemandBDemand0015304560 7590 105 120 135 150QUANTITY (Millions of pounds)SupplyThe new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry isrun.in the long

Short-Run Changes: Demand Increase Due to Health Benefits: The publication claims that jackfruit…

Answered: Suppose that the jackfruit industry is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Caustic sodaSuppose that demand for caustic soda in Freedonia is given by D(P) = 10000 - 2P, where the quantity demanded is measured in units per year and the price P is in $ per unit. The market for caustic soda in Freedonia is perfectly competitive and consists of many price-taking firms each operating an identical plant. Caustic soda production requires chlorine which all plants must buy from a monopolist named Freedonia Chlorine Corporation (FCC). FCC can produce chlorine at zero marginal cost and has no fixed costs. Producing one unit of caustic soda requires one unit of chlorine and FCC charges a price of PC per unit of chlorine. Caustic soda plants have constant marginal cost which is MC = $(PC + 1000). (For example, if PC = $200 then each plant has MC = $1200.) Suppose caustic soda firms have no fixed costs and there are no capacity constraints in the market. a. Suppose a new market opportunity opens up and FCC can now sell chlorine in Baldonia as a monopolist. Demand…
is the price at which the number of products that businesses are willing to supply equals the number of products consumers are willing to purchase at a point in 2) 2) time. A) Bundled B) Equilibrium C) Maximum retail D) Discount E) Competitive
THIS EXERCISE FOR MATHEMATICAL ECONOMIC : Question (1): Suppose the estimated quantity demand for potato chips is Q = 140 – 15p and the quantity supply function for potato chips is Q = 115 + 10p. Find the equilibrium price and quantity for the number of bags of potato chips. Suppose that the main costs of producing potato chips are labor and potatoes. On a per unit basis, the cost of producing and manufacturing a bag of potato chips rises by $1.50. The firms are citing higher labor costs and fewer potatoes are grown due to the poor climate. What will be the new equilibrium price and quantity? Whichever curve you think a shift will occur, derive the new function. Suppose that a health news piece has been published indicating the ill effects of consuming potato chips. The news has been published after the firms incurred the higher costs of production. Consumers are being advised to consume popcorn or pretzels instead of potato chips. How would that affect the market for potato…
A company produces a special new type of TV. The company has fixed costs of $494,000, and it costs $1100 to produce each TV. The company projects that if it charges a price of $2500 for the TV, it will be able to sell 700 TVs. If the company wants to sell 750 TVs, however, it must lower the price to $2200. Assume a linear demand. What price should be set to earn maximum profits?
Consider a regional with a uniform distribution of population where every household consumes the same amount of a good. The regional government recently stated its policy for the location of factories making the good: “A factory should reach the minimum point of its average production cost curve at an output of 1000 units. Since the total demand for the good is 4000 units, we should have 4 factories in the region. Since the distribution of the population is uniform, the factories should be distributed uniformly throughout the region” Comment on this policy as to in particular whether there should be more or fewer factories for efficiency?
Discuss the scenarios below. Please treat each scenario separately. (i) You are the manager of a local restaurant. You notice that when you lower the price of your meals, your total revenue rises. What conclusion can you draw about the demand for your restaurant's meal? (ii) For a car manufacturing industry, why does the elasticity of supply generally increase as more time passes after a price change? (iii) Over 20 years period, tuition fees at a university have increased by 60%. At the same time, the number of students enrolled for the courses at the same university had increased from 20,000 to over 32,000. Based on the Law of demand, when a price of a product increases the demand for the same product will reduce. Based on the scenario of the university, do you think the law of demand is untrue? Please explain your conclusion using appropriate graphs.
A retail chain will buy 900 cordless phones if the price is $30 each and 800 if the price is $40. A wholesaler will supply 350 phones at $40 each and 1400 at $70 each. Assuming that the supply and demand functions are linear, find the market equilibrium point and explain what it means.
Consider the market for ice cream cones. Suppose that supply in this market is given by PS = Q$ and demand is given by PD = 30 – 4 × QD. Answer the following questions. Notice that the competitive equilibrium (Qº,Pe) and the point (Q%,Pº) are both on the demand curve. Use them to compute the price elasticity of demand.
Imagine a new company enters a market selling tutoring. The firm does some experimentation in the market, and it reports the following data points. At $75 per student, 2,250 students sign up for tutoring. At $30 per student, 9,000 students sign up. At $150 per student, no students sign up. 1.Write the equation representing this demand curve. 2. Relax the assumption that demand is linear; instead, assume only that the law of demand holds. Given this assumption and the data you observe, what can we say about the number of students who sign up at prices greater than $75? The school’s accountants determine that when the price per student is $15 it can supply 1,500 spots for tutoring, and that when the price is $45, it can supply 7,500. 3.Relax the assumption that supply is linear; instead, assume only that the law of supply holds. Given this assumption and the data you observe, what can we say about the number of student slots the school supplies at prices greater than $400? 4.Find the…
6. A record company estimates the industry demand for "hard alternative rock" albums to be: QD-1000 -125 P. It estimates the industry supply to be: QS = 125-P a. Given these estimates, what does it expect the industry output and price to be? b. A government commission announces that lyrics on "hard alternative rock" albums are offensive and should be banned. This causes consumers to purchase 20% more of such albums at any given price, compared to question 6a. What effect will this have on industry output and the price? c. Calculate the consumer surplus for parts a and b above. Are consumers better or worse off given the commission's recommendation?
Demand for Corn Flakes is: P = 14 - Q. Supply of Kellogg's Corn Flakes is: P = 2 + Q. Now a generic company enters the market, selling generic Corn Flakes for $4. Assume consumers are indifferent between generic and Kellogg's Corn Flakes. When the generic corn flakes enter the market, Kellogg's will sell how many less boxes of their own cereal?
Demand for parking in the City of Chambana is given by Qd = 210 – 0.5P, and the supply is Qs= P – 90, where price is in cents per car per day and quantity is in hundreds of cars parked per day. Draw a graph of the given demand and supply curve and label it as D0 and S0. Indicate numerically all relevant intercepts for your demand and supply curves on your graph. Find the short run equilibrium price and quantity in this market and label the numbers you found on the graph. State your equilibrium price and quantity under your graph; be careful in correctly using the units of measurement indicated in the directions for this question. Now, suppose that in order to fund improvements to the city’s parking garage, the city institutes a tax of 30 cents per unit of parking sold. E. Depict the effect of the tax by drawing an effective supply curve and label it as S1. Clearly show the direction of the shift and label the exact dollar amount by which it shifts. F. Indicate numerically all relevant…

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