Connect Online Access for Essentials of Economics
11th Edition
ISBN: 9781260521269
Author: Bradley Schiller, Karen Gebhardt
Publisher: Mcgraw-hill Higher Education (us)
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Question
Chapter 3, Problem 1QFD
To determine
The demand and supply curve for human kidneys.
Expert Solution & Answer
Explanation of Solution
If the market in kidneys were legal, then the demand and supply curves look like the ones shown in the diagram.
The demand and supply for the kidney are relatively inelastic because this is the organ that a person needs in emergency situations despite its high cost. The demand for human organs is inelastic in nature.
If the market of kidneys is legal, then the person who needs the kidney would get them despite fluctuating prices.
The demand and supply mechanism keeps the market for the kidney in equilibrium.
If the law that prohibits the sale of kidneys exists in a market, the demand for kidneys will still remain the same. But since the supply is restricted, now a person can only donate the organ instead of selling them.
Suppose in the presence of a law that prohibits the selling of organs, X quantity of kidney is donated by peoples.
Since selling is prohibited, the supply curve is a vertical line parallel to the y-axis because supply is limited and cannot increase according to the market demand.
This explanation is shown in the graph, where the x-axis represents the quantity of the kidney and the y-axis represents the price for the kidney.
The ban or prohibition on the sale of human organs promotes barter exchange, other illegal activities and the black market in organ transfers.
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Students have asked these similar questions
Exercise 5Consider the demand and supply functions for the notebooks market.QD=10,000−100pQS=900pa. Make a table with the corresponding supply and demand schedule.b. Draw the corresponding graph.c. Is it possible to find the price and quantity of equilibrium with the graph method? d. Find the price and quantity of equilibrium by solving the system of equations.
1. Consider the market supply curve which passes through the intercept and from which the marketequilibrium data is known, this is, the price and quantity of equilibrium PE=50 and QE=2000.a. Considering those two points, find the equation of the supply. b. Draw a graph for this equation.
2. Considering the previous supply line, determine if the following demand function corresponds to themarket demand equilibrium stated above. QD=.3000-2p.
Supply and demand functions show different relationship between the price and quantities suppliedand demanded. Explain the reason for that relation and provide one reference with your answer.
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