ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337408059
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%
Chapter 4, Problem 4P
To determine
The reason the firm increases the quantity supplied when the
Concept Introduction:
Law of supply states that as the price of the good, increases the quantity supplied of the good increases and vice-versa, other things remaining same.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
2.2. Use a diagram to illustrate what will happen to the equilibrium price and quantity of a product
if the demand for the product increases. Also mention three factors that can cause an increase in
demand.
(10)
(Figure: The Supply of Apple TV Rentals) Use Figure: The Supply of Apple TV Rentals. An increase in the price of online
movie rentals would result in the change illustrated by the move from:
Price of
Apple TV
rental
0
Price of
Apple TV
rental
n
(a)
Quantity (per period)
(c)
Quantity (per period)
Price of
Apple TV
rental
Price of
Apple TV
rental.
0
(b)
S₂
S₁
Quantity (per period)
(d)
Quantity (per period)
Price
(per bushel)
$10
9.
8
7.
6.
4
3.
21
2.
4
6 8 10
12
Quantity of wheat
(thousands of bushels per period)
Reference: Ref 3-6 Figure The Demand and Supply of Wheat
(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of
Wheat. A price of
will result in a
Chapter 4 Solutions
ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
Knowledge Booster
Similar questions
- ellobrate the factors that will be affecting the supply of the following products in the next several years.why do you think the factors will cause the supply to increase or decrease? Crude oil, hotle rooms, Beef, Fast food outlets, Laptop companiesarrow_forwardSuppose that the price elasticity of demand for a packet of cigar is -0.85 and the price elasticity of supply is 1.5 at market equilibrium. As a result of an increase on sales tax, the new equilibrium price rises by 15%. (a) What is the percentage change in quantity demanded of cigar? Show your calculation. (b) Explain with a relevant diagram, what will happen to total revenue in the cigar industry? (c) With the use of an appropriate diagram, explain with the above information, who will bear most of the burden between consumers and producers of the sales tax?arrow_forward18. _____________________refers to various quantities of a commodity or service that a consumer would purchase at a given time at various prices in a market.arrow_forward
- The following table shows the demand and supply of tickets of a football game which will be held at Shah Alam Stadium. Unit Price (RM) Market Demand (units) Market Supply (units) 20 5000 3500 40 4000 3500 60 3000 3500 80 2000 3500 100 1000 3500 a) On your foolscap paper, draw the demand and supply curves. Label all axes, all curves and the equilibrium point. (6m) b) How much is the equilibrium price and equilibrium quantity? (2m) c) At which price will there be a surplus of 2500 tickets? (1m) d) What will happen when the market price is RM40? Show your answer on the same diagram. (3m) e) Why is the supply of tickets fixed at 3500? (1m)arrow_forwardDo b and carrow_forwardExplain the shifts in demand and/or supply that can result in the following observations: (Assume the demand curve is downward sloping and the supply curve is upward sloping.) （In words, and graphic thanks） (a) Both price and quantity rise. (b) Price rises, quantity falls. (c) Price rises, quantity doesn't change. (d) Quantity rises, price doesn't change.arrow_forward
- 2. Freihofer's bread is a normal good produced by the Freihofer Bakery. Using clearly labeled Demand and Supply curves, show what will happen to the equilibrium price and quantity of Freihofer's bread in each of the following situations? (a) Due to an expansion, households that buy Freihofer's bread experience an increase in income. (b) (c) (d) (e) (f) The cost of wheat used in Freihofer's bread increases significantly. Freihofer Bakery buys improved ovens that reduce the costs of Freihofer's bread. Lovely Loaf, a rival, increases the price of its bread. Consumers become health conscious and switch to low-calorie breads. Situations (a) and (b) occur at the same time.arrow_forwardTyped answer.arrow_forwardAssume gasoline is sold in a competitive market, the equilibrium price is $50 per barrel, and the equilibrium quantity is 1000 barrels. (a) Using the numerical values above, draw a correctly labeled graph of the gasoline market and show each of the following. (i) The equilibrium price (ii) The equilibrium quantity (b) At a price of $40 per barrel, will there be a surplus or a shortage in the market? Explain. (c) Assume new oil wells are discovered. On your graph from part (a), show how this change will affect the equilibrium price and quantity in the market for gasoline. (d) Assume instead there is an increase in the price of gasoline-operated automobiles. How will this change affect the market for gasoline? Explain. (e) If both changes in part (c) and part (d) occurred simultaneously, what will happen to the equilibrium price and quantity of gasoline?arrow_forward
- (Figure: The Market for Chai Lattes) Use Figure: The Market for Chai Lattes. What is the price elasticity of supply between the prices of $2 and $2.50 per cup, using the midpoint method? Price per chai latte $4.50 4.00 3.50 3.00€ 2.50 2.00 1.50 1.00 0.50 0000 1.51 3.00 1.00 0.33 0 200 S D 600 1,000 1,400 1,800 Quantity of chai lattes in cupsarrow_forwardQUESTION 25 What effect should each of the following have on the demand for gasoline in a competitive market? (a) the economy moves into a recession (c) an increase in the price of car insurance, taxes, maintenance For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arialarrow_forwardiii) discuss one factor EACH,that you think influence demand and supply for milk. Provide examplesarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
