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
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Chapter 6, Problem 8P
To determine
The
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6) The quantity demanded of a certain brand of smart phone is 2000 per week when the unit price is $84. For each decrease in the unit price $5 below $84, the quantity demanded increases by 50 units. The supplier will not market any of the smartphones if the unit price is $60 or less, but the supplier will market 1800 per week if the unit price is $90. The supply and demand equations are known to be lineara) Find the demand and supply equationsb) Find the equilibrium quantity and price
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A consumer has inverse demand of
p=15−1q
for a good and the market price is
$4.00.
Calculate consumer surplus and the total value of the good for the corresponding quantity consumed.
Consumer surplus is $enter your response here.
(Enter your response rounded to two decimal places.)
The consumer's expenditure for the good is
$enter your response here. (Enter your response rounded to two decimal places.)
Question 4
Suppose there is a decrease in supply in a market where the supply curve slopes upwards
and the demand curve slopes downwards. Which of the following would not occur?
a) An excess supply.
b) A fall in price.
c) A fall in supply.
d) A fall in the equilibrium level of expenditure.
Question 5
Suppose a market is in equilibrium, and then the demand increases. Which of the following
would be shown on a graph that illustrated the effects?
a) An excess demand at the initial equilibrium price.
b) An excess demand at the new equilibrium price.
c) An excess supply at the initial equilibrium price.
d) An excess supply at the new equilibrium price.
Chapter 6 Solutions
ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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- 6. Suppose that demand and supply of apples are described by the following equations: P = 100 - 3Q (demand) P = 20 + Q (supply) a) Calculate the equilibrium price and quantity. Illustrate. b) Suppose a $4 tax is placed on apples. What is the new equilibrium quantity? How much do consumers pay to get this quantity? How much do suppliers receive for selling this quantity? Show your results on a supply & demand diagram.arrow_forward9) MARKET EQUILIBRIUM Suppose the demand for a product is given by p = d(q) = -0.4q + 300 and the supply for the same product is given by p = s(q) = 0.2q. For both functions, q is the quantity and p is the price, in dollars. a. Find the equilibrium point. (i.e. the market demand quantity and the market price) b. Find the consumer surplus at the equilibrium price. c. Find the producer surplus at the equilibrium price.arrow_forward4arrow_forward
- 1arrow_forwardSuppose the demand function is linear. At p = 8, quantity demanded is Q = 16. At p = 15, quantity demanded is Q = 10. For the price increase from 8 to 15, the loss in consumer surplus due to fewer goods being purchased is -- surplus due to a higher price on the goods still purchased is and the loss in consumerarrow_forwardConsider the market for wine in the diagram below: 70 Price ($) 60 50 40 30 20 10 S D 100 200 300 400 500 600 700 800 Wine (millions of bottles) $45 and 550 million bottles of wine $45 and 500 million bottles of wine $50 and 600 million bottles of wine $50 and 500 million bottles of wine Suppose supply shifts to the right by 100 million bottles of wine. What would be the new equilibrium price and quantity of wine as a result of this increase in supply?arrow_forward
- Refer to Question 4c. The total surplus for theater movies is $_____. Do not forget to round to two decimal places, input the decimal point and two places to the right of the decimal point, and place a comma, if needed.arrow_forwardConsider the demand for measuring tapes. The demand for measuring tapes is Qd 750 7p and the supply is Qs = 500 + 6p. Use the equations to develop a table with price, demand and supply, then draw the market graph. Use the graph to calculate the consumer's surplus.arrow_forwardFind the consumers’ surplus and the producers’ surplus at the equilibriumprice level for the given price–demand and price–supply equations and draw the graph. (You may round all values to the nearest integer). p = D(x) = 185e-0.005x p = S(x) = 25e 0.005xarrow_forward
- 10) 8. Use the following graph for the milk market to answer the question below. There would be excess supply (a surplus) of milk whenever the price is A) between $1.5 and $2.00 per gallon. B) lower than $1.50 per gallon. C) lower than $2.00 per gallon. D) higher than $1.50 per gallon. Price (per gallon) $2.00 $1.50 $1.00 0 3 G 20 27 28 30 35 Millions of Gallons of Milk per Weekarrow_forwardQ4arrow_forwardTwo months ago, on July 1, 2019, the State of Illinois raised gasoline taxes by $.19 (19 cents) per gallon of gas. Graphically depict the market for Illinois gasoline prior to the July 2019 increase in gasoline tax. Clearly indicate equilibrium Q and P on the graph. (Only a graph is needed for this question)arrow_forward
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