Chapter 3.1, Problem 40AYU

(a)

To determine

To calculate: The quantity of the equilibrium price for hot dogs at the baseball game.

Answer to Problem 40AYU

The equilibrium quantity is $3$ .

Explanation of Solution

Given information:

  $\begin{array}{l}S\left(p\right)=-2000+3000p\\ D\left(p\right)=10,000-1000p\end{array}$

Where $p$ = price of hot dog.

Formula used:

  $\begin{array}{l}S\left(p\right)=-2000+3000p\\ D\left(p\right)=10,000-1000p\end{array}$

Calculation:

The quantity of the equilibrium price for hot dogs is calculated as:

  $\begin{array}{l}S\left(p\right)=-2000+3000p\\ D\left(p\right)=10000-1000p\\ S\left(p\right)=D\left(p\right)\\ -2000+3000p=10000-1000p\\ 4000p=12000\\ p=3\end{array}$

b.

To determine

To calculate: The prices for which quantity demanded is greater than quantity supplied.

Answer to Problem 40AYU

The prices for which quantity demanded is greater than quantity supplied is $3$ .

Explanation of Solution

Given information:

  $\begin{array}{l}S\left(p\right)=-2000+3000p\\ D\left(p\right)=10,000-1000p\end{array}$

Where $p$ = price of hot dog.

Formula used:

  $\begin{array}{l}S\left(p\right)=-2000+3000p\\ D\left(p\right)=10,000-1000p\end{array}$

Calculation:

The prices for which quantity demanded is calculated as.

  $\begin{array}{l}S\left(p\right)=-2000+3000p\\ D\left(p\right)=10000-1000p\\ S\left(p\right)>D\left(p\right)\\ -2000+3000p>10000-1000p\\ 4000p>12000\\ p>3\end{array}$

c.

To determine

To calculate: Thing will eventually happen to the price of hot dogs if quantity demanded is greater than quality supplied.

Answer to Problem 40AYU

The statement is explained.

Explanation of Solution

Given information:

  $\begin{array}{l}S\left(p\right)=-2000+3000p\\ D\left(p\right)=10,000-1000p\end{array}$

Where $p$ = price of hot dog.

Formula used:

  $\begin{array}{l}S\left(p\right)=-2000+3000p\\ D\left(p\right)=10,000-1000p\end{array}$

Calculation :

  $S\left(p\right)>D\left(p\right)$

If the quantity demanded is less than quantity supplied then the prices of hot dogs will decrease.