EBK ECONOMICS
21st Edition
ISBN: 8220106637173
Author: McConnell
Publisher: YUZU
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Question
Chapter 7, Problem 5DQ
To determine
Consumer behavior and value of time.
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Suppose that the inverse demand for eggs is P = 12 -0.010d, and the inverse
supply of eggs is P = 2 +0.01Q5, where Q = million eggs and P= USD/egg. The
market-clearing price is equal to ________(USD/egg), and the market clearing
quantity is equal to
(m eggs).
O 7,500
6,400
O 0.5, 250
O4, 200
The table below shows two demand schedules for a given style of men’s shoes—that is, how many pairs per month will be demanded at various prices at a men’s clothing store in Winnipeg called Stromnord.
Price
D1QuantityDemanded
D2QuantityDemanded
$85
53
13
80
60
15
75
68
18
70
77
22
65
87
27
Suppose that Stromnord has exactly 55 pairs of this style of shoe in inventory at the start of the month of July and will not receive any more pairs of this style until at least August 1. a. If demand is D1, what is the lowest price that Stromnord can charge so that it will not run out of this model of shoe in the month of July? What if demand is D2? If demand is D1, the lowest price Stromnord can charge is $ .If demand is D2, the lowest price Stromnord can charge is $ . b. If the price of shoes is set at $85 for both July and August and demand will be D2 in July and D1 in August, how many pairs of shoes should Stromnord order for August if it wants to end the month of August…
11. For most products, higher prices result in a decreased demand, whereas lower prices result
in an increased demand. Let
d = annual demand for a product in units
p = price per unit
Assume that a firm accepts the following price-demand relationship as being realistic:
d = 800 – 10p
where p must be between $20 and $70.
a. How many units can the firm sell at the $20 per-unit price? At the $70 per-unit
price?
b. What happens to annual units demanded for the product if the firm increases the per-
unit price from $26 to $27? From $42 to $43? From $68 to $69? What is the sug-
gested relationship between the per-unit price and annual demand for the product
in units?
c. Show the mathematical model for the total revenue (TR), which is the annual demand
multiplied by the unit price.
d. Based on other considerations, the firm's management will only consider price alterna-
tives of $30, $40, and $50. Use your model from part (b) to determine the price alterna-
tive that will maximize the total…
Chapter 7 Solutions
EBK ECONOMICS
Ch. 7.1 - Prob. 1QQCh. 7.1 - Prob. 2QQCh. 7.1 - Prob. 3QQCh. 7.1 - Prob. 4QQCh. 7.A - Prob. 1ADQCh. 7.A - Prob. 2ADQCh. 7.A - Prob. 3ADQCh. 7.A - Prob. 1ARQCh. 7.A - Prob. 2ARQCh. 7.A - Prob. 1AP
Ch. 7.A - Prob. 2APCh. 7.A - Prob. 3APCh. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQCh. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7P
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Similar questions
- The following table shows two demand schedules for a given style of men's shoe-that is, how many pairs per month will be demanded at various prices at Stromnord, a men's clothing store. $ Price $75 70 65 60 55 $ D1 Quantity Demanded 53 60 68 77 87 Suppose that Stromnord has exactly 65 pairs of this style of shoe in inventory at the start of the month of July and will not receive any more pairs of this style until at least August 1. Instructions: Enter your answers as a whole number. a. If demand is D₁, what is the lowest price that Stromnord can charge so that it will not run out of this model of shoe in the month of July? What if demand is D2? D2 Quantity Demanded 13. 15 18 22 27 b. If the price of shoes is set at $75 for both July and August and demand will be D2 in July and D₁ in August, how many pairs of shoes should Stromnord order if it wants to end the month of August with exactly zero pairs of shoes in its inventory? pair(s) How many pairs of shoes should it order if the price…arrow_forwardquestion attached!arrow_forwardYou are the manager of a firm that receives revenues of $60,000 per year from product X and $80,000 per year from product Y. The own price elasticity of demand for product X is -1.5, and the cross- price elasticity of demand between product Yand X is -1.4. How much will your firm's total revenues (revenues from both products) change if you increase the price of good X by 2 percent? Instructions: Enter your response rounded to the nearest dollar. Use a negative sign (-) if applicable. %24arrow_forward
- During the Covid-19 pandemic that hits the world, the demand for personal computers and laptops has increased significantly due to online learning. One of the popular brands is Lenovo. The monthly supply of Lenovo laptops is given by the equation QS = 15,000 + 43.75P. If the current price for Lenovo laptops is $800, what is the price elasticity of supply for this brand? O a. 0.7 O b. 0.9 O c. 0.75 O d. No correct answers.arrow_forwardConsider the table below. Assuming the law of demand holds, the cell labeled "?" could be which of the following quantities? Price of a Quantity of movies movie Demanded $15 155 $17 ? O 155 163 157 171 O 143arrow_forwardOn April 1, the price of gas at Bob's Corner Station was $4.95 per gallon. On May 1, the price was $5.45 per gallon. On June 1, it was back down to $4.95 per gallon. Between April 1 and May 1, Bob's price increased by or Between May 1 and June 1, Bob's price decreased by or Suppose that at a gas station across the street, prices are always 20% higher than Bob's. In absolute dollar terms, the difference between Bob's prices and the prices across the street is when gas costs $5.45 than when gas costs $4.95. Some economists blame high commodity prices (including the price of gas) on interest rates being too low. Suppose the Fed raises the target for the federal funds rate from 2% to 2.75%. This change of percentage points means that the Fed raised its target by approximatelyarrow_forward
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- QUESTION 2 Assume the demand function is: Q = 100-2P What is the price elasticity of demand over the $30 to $40 range of the demand curve (please use the midpoint formula and insert your solu QUESTION 3 True or False. The solution to Question 2 is considered elastic. O True False QUESTION 4 Assume the demand function is: Q = 100-2P What is the price elasticity of demand over the $10 to $20 range of the demand curve (please use the midpoint formula and insert your solu QUESTION 5 True or False. The solution to Question 4 is considered elastic. O True O False Click Save and Submit to save and submit. Click Save All Answers to save all answers.arrow_forwardQ13arrow_forward8. Two software companies sell competing products. These products are substitutes so that the number of units that either company sells is a decreasing function of its own price and an increasing function of the other product's price. Let P1 and X1 be the price and quantity sold of product 1, and P2 and X2 the price and quantity sold of product 2. We 1,000/90P2+P1). Each company has have that X1 = 1,000 90-P1+ and X2 = incurred a fixed cost for designing their software and writing programmes, but the cost of selling to an extra user is zero. As the firms compete in prices, each company will choose a price that maximises its profits.arrow_forward
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