(a)
Mention the
The market of baseball tickets at your college stadium, which seats
Price | Quantity demanded | Quantity supplied |
| | |
| | |
| | |
| | |

Answer to Problem 24P
The equilibrium
Explanation of Solution
The above table shows a different prices with respect to change in
CONCEPT INTRODUCTION:
Equilibrium price is defined as the point at which the quantity demanded is equal to quantity supplied. It is the price at which supplier is ready to supply its goods and services and buyer is ready to buy the product and services. Equilibrium price tends to stay stable but the variables that affects the supply and demand chain in turn affects the price of the equilibrium. When the demand and supply curves meets that point is considered as equilibrium price point.
(b)
Figure out what is unusual about the supply curve.
The market of baseball tickets at your college stadium, which seats
Price | Quantity demanded | Quantity supplied |
| | |
| | |
| | |
| | |

Answer to Problem 24P
Here the unusual thing about the supply curve is that its line is straight parallel to Y- axis instead of having a slope.
Explanation of Solution
While analyzing the table one can see no change in the quantity supplied as the maximum sitting of the stadium is fixed which cannot be change with the change in price of the tickets. Since there is will be no change in the quantity supplied, the supply curve would be considered as perfectly in elastic, here the quantity supplied remain ineffective by any change in the price
Hence the curve will move parallel to Y- axis creating straight line.
CONCEPT INTRODUCTION:
The positioning of supply curve with respect to price and quantity axis determines elasticity of the supply curves. The elasticity of the supply curve depends on the willingness of the supplier to change its price of the goods and services. Very elastic supply curve indicate very responsive towards the change in price of the goods and service while inelasticity refers to unresponsiveness towards the change in price.
(c)
Mention the prices at which the shortage will occur.
The market of baseball tickets at your college stadium, which seats
Price | Quantity demanded | Quantity supplied |
| | |
| | |
| | |
| | |

Answer to Problem 24P
Here shortage will occur at ticket price
Explanation of Solution
As the definition of market shortage states that when the quantity demanded is more than the quantity supplied this situation is referred to as market shortage, here when observed in the table the quantity demanded exceeds up to
CONCEPT INTRODUCTION:
Shortage:- Some time the market is not in
(d)
Mention the prices at which surplus will occur.
The market of baseball tickets at your college stadium, which seats
Price | Quantity demanded | Quantity supplied |
| | |
| | |
| | |
| | |

Answer to Problem 24P
Here at price
Explanation of Solution
As we observe the table the prices at which the demand is less as compared to supply of the tickets are
At both the occasions the when demand of the tickets are compared with the supply of ticket. There is huge gap in between them.
CONCEPT INTRODUCTION:
Market surplus is a stage when the quantity supplied is more than the quantity demanded. The reason could be to earn more profit or to get rid of stored stocks. The
(e)
If there is addition of new students (all baseball fans) next year of around
The market of baseball tickets at your college stadium, which seats
Price | Quantity demanded | Quantity supplied |
| | |
| | |
| | |
| | |

Answer to Problem 24P
The new quantity demanded and quantity supplied schedule are as shown in the table
Price | Quantity demanded | Quantity supplied |
| | |
| | |
| | |
| | |
Also as can been determined now the new equilibrium price would be
Explanation of Solution
New schedule of demand and supply as shown in the table
Price | Quantity demanded | Quantity supplied |
| | |
| | |
| | |
| | |
If there is addition of 1000 students next year who all are baseballs fans, this would lead to addition to quantity demanded the equilibrium price point will shift towards price where demand and supply are same.
CONCEPT INTRODUCTION:
Equilibrium price is defined as the point at which the quantity demanded is equal to quantity supplied. It is the price at which supplier is ready to supply its goods and services and buyer is ready to buy the product and services. Equilibrium price tends to stay stable but the variables that affects the supply and demand chain in turn affects the price of the equilibrium. When the demand and supply curves meets that point is considered as equilibrium price point.
Want to see more full solutions like this?
- Discuss the impact of exchange rate volatility on the economy and its impact on your organisation. Make use of the relevant diagrams.arrow_forwardMacroeconomic policies have different effects on the price level and output (national income). Discuss the impact of a monetary policy that seeks to encourage economic growth.arrow_forwardCan you please help with this one. Some economists argue that taxing consumption is more efficient than taxing income. Following the same argument, the minister of finance of a country introduced a new tax for sugar based products “sugar tax” to promote healthy eating in the economy. Please use relevant diagrams to explain the impact of the tax on consumers, producers and the tax revenue when sugar is elastic and inelastic.arrow_forward
- profit maximizing and loss minamization fire dragon co mindtaparrow_forwardProblem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.arrow_forwardProblem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…arrow_forward
- You are the manager of a large automobile dealership who wants to learn more about the effective- ness of various discounts offered to customers over the past 14 months. Following are the average negotiated prices for each month and the quantities sold of a basic model (adjusted for various options) over this period of time. 1. Graph this information on a scatter plot. Estimate the demand equation. What do the regression results indicate about the desirability of discounting the price? Explain. Month Price Quantity Jan. 12,500 15 Feb. 12,200 17 Mar. 11,900 16 Apr. 12,000 18 May 11,800 20 June 12,500 18 July 11,700 22 Aug. 12,100 15 Sept. 11,400 22 Oct. 11,400 25 Nov. 11,200 24 Dec. 11,000 30 Jan. 10,800 25 Feb. 10,000 28 2. What other factors besides price might be included in this equation? Do you foresee any difficulty in obtaining these additional data or incorporating them in the regression analysis?arrow_forwardsimple steps on how it should look like on excelarrow_forwardConsider options on a stock that does not pay dividends.The stock price is $100 per share, and the risk-free interest rate is 10%.Thestock moves randomly with u=1.25and d=1/u Use Excel to calculate the premium of a10-year call with a strike of $100.arrow_forward
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningEconomics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub CoEconomics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc





