(a)
The
Answer to Problem 1E
Hence, the price along the vertical axis and the quantity along the horizontal axis has been determined and the first two columns have been plotted.
Explanation of Solution
The graph is plotted by joining 3 points of price on Y-axis to the corresponding quantity sold on the X-axis.
To find the quantity sold when the price is a certain dollar, we can take the help of the line obtained by plotting 3 price point in the Y-axis to the corresponding quantity in the x-axis in the graph sheet, and join them to form a sloping straight line.
Once the new quantity is found for a particular price point from the above straight line, we can use this information to find the total revenue at that price.
(b)
The quantity sold when the price is $550.
Answer to Problem 1E
When the price is 550$, the quantity sold is 1100.
Explanation of Solution
From the above-plotted line on the graph, we find that the point when the price on Y-axis is 550$, the corresponding quantity sold on X-axis is 1100 numbers.
To find the quantity sold when the price is a certain dollar, we can take the help of the line obtained by plotting 3 price point in the Y-axis to the corresponding quantity in the x-axis in the graph sheet, and join them to form a sloping straight line.
Once the new quantity is found for a particular price point from the above straight line, we can use this information to find the total revenue at that price.
(c)
To plot a graph and to measure the quantity on the horizontal axis and to determine the total revenue on the vertical axis.
Answer to Problem 1E
The graph is plotted and the quantity sold at 550$ is 1100 numbers.
Explanation of Solution
Now in the graph drawn above, the quantity sold is taken on X-axis while the total revenue obtained for that numbers of corresponding quantity sold is taken on Y-AXIS.
Next, we plot the points of total quantity sold on the horizontal X-axis versus the total Revenue obtained by selling each number of that quantity on the vertical Y-Axis. We take such thee points where the quantity-sold and corresponding revenue interacts, and join them to form a straight line.
To find the quantity sold when the price is at a certain dollar, we can take the help of the line obtained by plotting 3 price point in the Y-axis to the corresponding quantity in the x-axis in the graph sheet, and join them to form a sloping straight line.
Once the new quantity is found for a particular price point from the above straight line, we can use this information to find the total revenue at that price.
(d)
The total revenue when the price is $550 and to determine if the total revenue will increase or decrease when the price is lowered.
Answer to Problem 1E
When the quantity sold is $ 550, the total revenue is $ 6,40,000.
Explanation of Solution
We already know the quantity sold at each price point. Conversely, we know the price too when a particular number of items is sold. In this problem, the total revenue is to be found when the price is 550$. Now the corresponding total revenue to 1100 numbers is found to be 6,40,000 on the Y-axis. As we can see from the graph, decrease in price will increase the revenue.
To find the quantity sold when the price is a certain dollar, we can take the help of the line obtained by plotting 3 price point in the Y-axis to the corresponding quantity in the x-axis in the graph sheet, and join them to form a sloping straight line.
Once the new quantity is found for a particular price point from the above straight line, we can use this information to find the total revenue at that price.
Want to see more full solutions like this?
Chapter 1A Solutions
Microeconomics (MindTap Course List)
- In a paragraph, no bullet, points please answer the question and follow the instructions. Give only the solution: Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all. 10. What is Tinbergen’s constraint? Explain its importance in regard to US monetary policy.arrow_forwardIn a paragraph, no bullet, points please answer the question and follow the instructions. Give only the solution: Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all. 8. How does monetary policy supposedly translate into changes in AD?arrow_forwardIn a paragraph, no bullet, points please answer the question and follow the instructions. Give only the solution: Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all. 2. Carefully explain either Keynes’ “cookie jar” motive for holding money or the “saw-toothed model’s” motive for holding a safety stock.arrow_forward
- In a paragraph, no bullet, points please answer the question and follow the instructions. Give only the solution: Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all. 7.Carefully explain the Fisher equation for interest rates. What insight does it provide?arrow_forwardIn a paragraph, no bullet, points please answer the question and follow the instructions. Give only the solution: Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all. 3. Describe the general architecture of the Federal Reserve System.arrow_forwardIn a paragraph, no bullet, points please answer the question and follow the instructions. Give only the solution: Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all. 1. Define money. Carefully explain the three functions of money.arrow_forward
- In a paragraph, no bullet, points please answer the question and follow the instructions. Give only the solution: Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all. 5.Draw the Federal Reserve System’s Balance Sheet and briefly explain each of the main (highlighted in the PowerPoints and text) components.arrow_forwardIn a paragraph, no bullet, points please answer the question and follow the instructions. Give only the solution: Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all. 9. What are monetary rules? How are they carried out and what is the difference between monetary rules and discretionary behavior?arrow_forwardIn a paragraph, no bullet, points please answer the question and follow the instructions. Give only the solution: Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all. 4. What is interest payment on reserve balances used for? How does it work?arrow_forward
- A linear programming computer package is needed. As part of the settlement for a class action lawsuit, Hoxworth Corporation must provide sufficient cash to make the following annual payments (in thousands of dollars). Year 1 2 3 4 5 6 Payment 170 195 220 265 295 440 The annual payments must be made at the beginning of each year. The judge will approve an amount that, along with earnings on its investment, will cover the annual payments. Investment of the funds will be limited to savings (at 4% annually) and government securities, at prices and rates currently quoted in The Wall Street Journal. Hoxworth wants to develop a plan for making the annual payments by investing in the following securities (par value = $1,000). Funds not invested in these securities will be placed in savings. Security Current Price Rate (%) Years to Maturity 1 $1,055 6.750 3 2 $1,000 5.125 4 Assume that interest is paid annually. The plan will be submitted to the judge and, if approved,…arrow_forwardOn the 1st of April 2018, the South African National Treasury increase the value-added tax rate from 14% to 15%. This policy change had a wide-ranging impact on society. Discuss some of the benefits and drawbacks of making use of this type of tax to generate government revenue and what we may expect in terms of its impact on inflation and GDP growth within the economy. Please use some of the economics graphs to explain some scenariosarrow_forwardEskom is South Africa’s monopoly power producer which the majority of South Africans depend on. Suppose there is extensive deregulation in the power industry. What is the impact of this deregulation on the industry? Help me on discussing the new market structure as well as the impact on supply and demand. Use the relevant diagrams.arrow_forward
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning