A
To describe:Based on the given data and information, prove that the P=3 is the
A
Answer to Problem 1.2P
If there is a rise in the
Explanation of Solution
| Quantity Supplied | Quantity Demanded | |
| 1 | 100 | 700 |
| 2 | 300 | 600 |
| 3 | 500 | 500 |
| 4 | 700 | 400 |
| 5 | 900 | 300 |
By observing the above table, it can be seen that at a market price of 3, the quantity supplied equals to the quantity demanded. Hence, the equilibrium price is 3.
Introduction: The price at which the quantity of goods supplied is equal to the quantity of goods supplied is referred to as the market price.
B
To describe:
Based on the given and arrived at data, find out the reasons behind the prices 2 and 4 not being equilibrium prices.
B
Answer to Problem 1.2P
If there is a fall in the demand for the e-book as it is following the change in the prices of e-books it would result in an increase of complement.
Explanation of Solution
| Price | Quantity Supplied | Quantity Demanded |
| 1 | 100 | 700 |
| 2 | 300 | 600 |
| 3 | 500 | 500 |
| 4 | 700 | 400 |
| 5 | 900 | 300 |
By observing the above table, at a price of 2 the quantity supplied is lower than the quantity demanded, and hence it is not the equilibrium price.
Similarly, at the price of 4, the quantity demanded is more than the quantity supplied, and hence it is not the equilibrium price.
Introduction: The price at which the quantity of goods supplied is equal to the quantity of goods supplied is referred to as the market price.
C
To describe:
Graph the results of previous parts and show that the equilibrium price is achieved.
C
Answer to Problem 1.2P
If there is a rise in the demand for tablet devices which can eventually be following a change in the price of ultrathin laptop computers, that also happen to be the substitutes can result in increase in pricing.
Explanation of Solution
Upon observing the graph, as usual, it can be noticed that the supply curve and demand curve are intersecting at a price level of 3.
Hence, it can be concluded that the equilibrium price is 3.
Introduction: The price at which the quantity of goods supplied is equal to the quantity of goods supplied is referred to as the market price.
D
To describe:
Supposing the given assumption, possibility of the change in the data given in earlier problem.
D
Answer to Problem 1.2P
If there is also a fall in the demand for physical books it can result in following a change in the price of e-books which are also substitutes can result in the decrease of the prices.
Explanation of Solution
Provided that the people now are demanding 300 more quantity at every price change, the demand will be changed and can be observed in the given table:
| Price | Quantity Supplied | Quantity Demanded |
| 1 | 100 | 1000 |
| 2 | 300 | 900 |
| 3 | 500 | 800 |
| 4 | 700 | 700 |
| 5 | 900 | 600 |
In the resulting graph as shown below, the change in the quantity demanded would shift the demand curve outward:
Introduction: The price at which the quantity of goods supplied is equal to the quantity of goods supplied is referred to as the equilibrium price.
E
To describe:
Given the proposed change in the demand, outline the result in the graph.
E
Answer to Problem 1.2P
If there is also a fall in the demand for physical books it can result in following a change in the price of e-books which are also substitutes can result in the decrease of the prices.
Explanation of Solution
The proposed increase in the demand would change the equilibrium to new equilibrium represented by E1, for the new equilibrium price of P=4.
Introduction: The price at which the quantity of goods supplied is equal to the quantity of goods supplied is referred to as the equilibrium price.
F
To describe:
Find out the change in pattern for the given supply demanded.
F
Answer to Problem 1.2P
If there is also a fall in the demand for physical books it can result in following a change in the price of e-books which are also substitutes can result in the decrease of the prices.
Explanation of Solution
With the given new supply demanded at every price, observe the given table for the resulting changes:
| Price | Quantity Supplied | Quantity Demanded |
| 1 | 0 | 700 |
| 2 | 0 | 600 |
| 3 | 200 | 500 |
| 4 | 400 | 400 |
| 5 | 600 | 300 |
Such a change in the supply pattern would shift the supply curve to the inward.
Introduction: The price at which the quantity of goods supplied is equal to the quantity of goods supplied is referred to as the equilibrium price.
G
To describe:
Find out the equilibrium price in the market with the new supply relationship together with the demand relationship.
G
Answer to Problem 1.2P
If there is also a fall in the demand for physical books it can result in following a change in the price of e-books which are also substitutes can result in the decrease of the prices.
Explanation of Solution
With the given new supply demanded at every price, observe the given table for the resulting changes:
| Price | Quantity Supplied | Quantity Demanded |
| 1 | 0 | 700 |
| 2 | 0 | 600 |
| 3 | 200 | 500 |
| 4 | 400 | 400 |
| 5 | 600 | 300 |
The new equilibrium price would be P=4, at the given quantity supplied and the quantity demanded.
Introduction: The price at which the quantity of goods supplied is equal to the quantity of goods supplied is referred to as the equilibrium price.
H
To describe:
With the new demand and supply quantity relationships, observe the change in equilibrium price.
H
Answer to Problem 1.2P
If there is also a fall in the demand for physical books it can result in following a change in the price of e-books which are also substitutes can result in the decrease of the prices.
Explanation of Solution
With the reduce in the supply and excess of demand at P=3, the result is that it is no more an equilibrium price.
This because, the supply and demand are not any more the same for the given price, and hence, the price is not any more an equilibrium price.
Introduction: The price at which the quantity of goods supplied is equal to the quantity of goods supplied is referred to as the equilibrium price.
I
To describe:
For the observed results at the supply shift, put out a graph.
I
Answer to Problem 1.2P
If there is also a fall in the demand for physical books it can result in following a change in the price of e-books which are also substitutes can result in the decrease of the prices.
Explanation of Solution
Introduction: The price at which the quantity of goods supplied is equal to the quantity of goods supplied is referred to as the equilibrium price.
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Chapter 1 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
- Consider the figure at the right. The profit of the single-price monopolist OA. is shown by area D+H+I+F+A. B. is shown by area A+I+F. OC. is shown by area D + H. ○ D. is zero. ○ E. cannot be calculated or shown with just the information given in the graph. (C) Price ($) B C D H FIG шо E MC ATC A MR D = AR Quantityarrow_forwardConsider the figure. A perfectly price-discriminating monopolist will produce ○ A. 162 units and charge a price equal to $69. ○ B. 356 units and charge a price equal to $52 for the last unit sold only. OC. 162 units and charge a price equal to $52. OD. 356 units and charge a price equal to the perfectly competitive price. Dollars per Unit $69 $52 MR 162 356 Output MC Darrow_forwardThe figure at right shows the demand line, marginal revenue line, and cost curves for a single-price monopolist. Now suppose the monopolist is able to charge a different price on each different unit sold. The profit-maximizing quantity for the monopolist is (Round your response to the nearest whole number.) The price charged for the last unit sold by this monopolist is $ (Round your response to the nearest dollar.) Price ($) 250 225- 200- The monopolist's profit is $ the nearest dollar.) (Round your response to MC 175- 150 ATC 125- 100- 75- 50- 25- 0- °- 0 20 40 60 MR 80 100 120 140 160 180 200 Quantityarrow_forward
- The diagram shows a pharmaceutical firm's demand curve and marginal cost curve for a new heart medication for which the firm holds a 20-year patent on its production. At its profit-maximizing level of output, it will generate a deadweight loss to society represented by what? A. There is no deadweight loss generated. B. Area H+I+J+K OC. Area H+I D. Area D + E ◇ E. It is not possible to determine with the information provided. (...) 0 Price 0 m H B GI A MR MC D Outparrow_forwardConsider the figure on the right. A single-price monopolist will produce ○ A. 135 units and charge a price equal to $32. B. 135 units and generate a deadweight loss. OC. 189 units and charge a price equal to the perfectly competitive price. ○ D. 189 units and charge a price equal to $45. () Dollars per Unit $45 $32 MR D 135 189 Output MC NGarrow_forwardSuppose a drug company cannot prevent resale between rich and poor countries and increases output from 3 million (serving only the rich country with a price of $80 per treatment) to 9 million (serving both the rich and the poor countries with a price of $30 per treatment). Marginal cost is constant and equal to $10 per treatment in both countries. The marginal revenue per treatment of increasing output from 3 million to 9 million is equal to ○ A. $20 per treatment, which is greater than the marginal cost of $10 per treatment and thus implies that profits will rise. ○ B. $20 per treatment, which is greater than zero and thus implies that profits will rise. ○ C. $30 per treatment, which is greater than the marginal cost of $10 per treatment and thus implies that profits will rise. ○ D. $5 per treatment, which is less than the marginal cost of $10 per treatment and thus implies that profits will fall. ○ E. $30 per treatment, which is less than the marginal revenue of $80 per treatment…arrow_forward
- Consider the figure. A single-price monopolist will have a total revenue of Single-Price Monopolist OA. 84×$13. O B. 92x $13. OC. 84×$33. OD. 92 x $33. C Price ($) $33 $13 MC MR D 84 92 Output The figure is not drawn to scale.arrow_forward10.As COVID-19 came about, consumers' relationship with toilet paper changed and they found themselves desiring more than usual. Eventually, toilet paper producers saw an opportunity to make more money and meet the growing demand. Which best describes this scenario as depicted in Snell's 2020 article? A. The demand curve shifted left and the supply curve shifted left B. The demand curve shifted left and the supply curve shifted right C. The demand curve shifted right and the supply curve shifted left D. The demand curve shifted right and the supply curve shifted rightarrow_forward5. Supply and Demand. The graph below shows supply and demand curves for annual medical office visits. Using this graph, answer the questions below. P↑ $180 $150 $120 $90 $60 $30 4 8 12 16 20 24 28 32 36 a. If the market were free from government regulation, what would be the equilibrium price and quantity? b. Calculate total expenditures on office visits with this equilibrium price and quantity. c. If the government subsidized office visits and required that all consumers were to pay $30 per visit no matter what the actual cost, how many visits would consumers demand? d. What payment per visit would doctors require in order to supply that quantity of visits? e. Calculate total expenditures on office visits under the condition of this $30 co- payment. f. How do total expenditures with a co-payment of $30 compare to total expenditures without government involvement? Provide a numerical answer. Show your work.arrow_forward
- 4. The table below shows the labor requirements for Mr. and Mrs. Howell for pineapples and coconuts. Which is the most accurate statement? A. Mrs. Howell has a comparative advantage in coconuts and the opportunity cost of 1 coconut for Mrs. Howell is 4 pineapples B. Mrs. Howell has a comparative advantage in pineapples and the opportunity cost of 1 pineapple for Mrs. Howell is .25 coconuts. C. Mr. Howell has a comparative advantage in pineapples and the opportunity cost of 1 pineapple is 1 coconut. D. Mr. Howell has a comparative advantage in both pineapples and coconuts and should specialize in pineapples. Labor Requirements for Pineapples and Coconuts 1 Pineapple 1 Coconut Mr. Howell 1 hour 1 hour Mrs. Howell 1/2 hour 2 hoursarrow_forward4. Supply and Demand. The table gives hypothetical data for the quantity of electric scooters demanded and supplied per month. Price per Electric Scooter Quantity Quantity Demanded Supplied $150 500 250 $175 475 350 $200 450 450 $225 425 550 $250 400 650 $275 375 750 a. Graph the demand and supply curves. Note if you prefer to hand draw separately, you may and insert the picture separately. Price per Scooter 300 275 250 225 200 175 150 250 400 375425475 350 450 550 650 750 500 850 Quantity b. Find the equilibrium price and quantity using the graph above. c. Illustrate on your graph how an increase in the wage rate paid to scooter assemblers would affect the market for electric scooters. Label any new lines in the same graph above to distinguish changes. d. What would happen if there was an increase in the wage rate paid to scooter assemblers at the same time that tastes for electric scooters increased? 1ངarrow_forward3. Production Costs Clean 'n' Shine is a competitor to Spotless Car Wash. Like Spotless, it must pay $150 per day for each automated line it uses. But Clean 'n' Shine has been able to tap into a lower-cost pool of labor, paying its workers only $100 per day. Clean 'n' Shine's production technology is given in the following table. To determine its short-run cost structure, fill in the blanks in the table. Fill in the columns below. Outpu Capita Labor TFC TVC TC MC AFC AVC ATC 1 0 30 1 1 70 1 2 120 1 3 160 1 4 190 1 5 210 1 6 a. Over what range of output does Clean 'n' Shine experience increasing marginal returns to labor? Over what range does it experience diminishing marginal returns to labor? (*answer both questions) b. As output increases, do average fixed costs behave as described in the text? Explain. C. As output increases, do marginal cost, average variable cost, and average total cost behave as described in the text? Explain. d. Looking at the numbers in the table, but without…arrow_forward
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