Consider a regional with a uniform distribution of population where every household consumes the same amount of a good. The regional government recently stated its
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Consider a regional with a uniform distribution of population where every household consumes the same amount of a good. The regional government recently stated its policy for the location of factories making the good: “A factory should reach the minimum point of its average production cost curve at an output of 1000 units. Since the total demand for the good is 4000 units, we should have 4 factories in the region. Since the distribution of the population is uniform, the factories should be distributed uniformly throughout the region” Comment on this policy as to in particular whether there should be more or fewer factories for efficiency?
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- Gasoline for cars is produced in a market. There are equations for the Supply and Inverse Demand of car gasoline that model its Supply and Demand graph. These equations are (for supply), P = 20 + Qs, and (for Inverse Demand), P = 80 - Qd. Due to gasoline shortages, some sellers may be able to get access to more gasoline and produce it better than others. As a result, the federal government placed a quantity restriction of 15 units on the sellers. (Part I) Draw the market equilibrium with the government intervention (Q** and P**) of the quantity restriction. Please label the graph for slopes, the equilibrium point, etc. (Part II) What is the market equilibrium without the intervention of the government? (Part III) The government decided that the previous quantity restriction was not sufficient. So, it increased the restriction from 15 units to 20 units. Consequently, what is the new market equilibrium point with this new intervention? It is not necessary to label this point on the…The food and feed demand curves used in the Application "Summing the Corn Demand Curves," were estimated by McPhail and Babcock (2012) to be Qfood = 1,487-22.1p and Qfeed = 6,247.5-226.7p, respectively, where Q is measured in billions of bushels of corn per year. Mathematically derive the total demand curve, which the application's figure illustrates. (Hint: Remember that the demand curve for feed is zero at prices above about $27.56 per bushel.) The total demand curve is (enter your responses rounded to one decimal place): Q=-p for p≥ $27.56 per bushel and Q = -p for p <$27.56 per bushel.THIS EXERCISE FOR MATHEMATICAL ECONOMIC : Question (1): Suppose the estimated quantity demand for potato chips is Q = 140 – 15p and the quantity supply function for potato chips is Q = 115 + 10p. Find the equilibrium price and quantity for the number of bags of potato chips. Suppose that the main costs of producing potato chips are labor and potatoes. On a per unit basis, the cost of producing and manufacturing a bag of potato chips rises by $1.50. The firms are citing higher labor costs and fewer potatoes are grown due to the poor climate. What will be the new equilibrium price and quantity? Whichever curve you think a shift will occur, derive the new function. Suppose that a health news piece has been published indicating the ill effects of consuming potato chips. The news has been published after the firms incurred the higher costs of production. Consumers are being advised to consume popcorn or pretzels instead of potato chips. How would that affect the market for potato…
- Botswana and South Africa both produce laptops. Botswana produces the Lenovo brand whereas South Africa produces the Acer brand. The demand and supply structure in both countries are given by the Dixit-Stiglitz model, with an elasticity of substitution equal to two in both countries. Assume that the laptop market in Botswana is much large than in South Africa. In both countries, the marginal labour input requirement is one and the fixed labour input per variety is 2.5. Botswana's labour employment in the cell phone industry is 20 million people whereas that of South Africa is 10 million people. Determine the number of varieties that will be supplied to Botswana and South Africa laptop markets in Autarky.The quantity of a product demanded by consumers is a function of its price. The quantity of one product demanded may also depend on the price of other products. For example, if the only chocolate shop in town (a monopoly) sells milk and dark chocolates, the price it sets for each affects the demand of the other. The quantities demanded, q₁ and q2, of two products depend on their prices, p₁ and P₂, as follows: If one manufacturer sells both products, how should the prices be set to generate the maximum possible revenue? What is that maximum possible revenue? Enter the exact answers. P₁ = i P2 = The maximum revenue is i 91235-4p₁ - 2P₂ 92 = 220-3p₁ - 4P2. iA local store will buy 20 doorbell cameras from a supplier if the price is $77 each. If the price drops to $27 , then the store will buy 30 . The supplier is willing to sell 66 doorbell cameras for the price of $50.50 each, but only 49 at a price of $42.00 each. Find the supply and demand functions and the market equilibrium point. Assume both the supply and demand are linear. Use integers, fractions or decimals to describe the slopes and p-intercepts. A) What is the equation for the demand? p= B) What is the equation for the supply? p= c) What is the market equilibrium point?Explain in details
- Suppose that the market demand curve for a good is given by D=80-2P-2I, where D is the quantity demanded, P is the price of the good, and I is consumer income in thousands of dollars. The good is a divisible good. The supply curve is given by S = 3P, where S is the quantity supplied. Assume that I = 15. (a) (10 points) How many units of the good are demanded with P = $4? (b) (10 points) Compute the size of a consumer surplus at P = $4. (c) (10 points) Derive the equilibrium price of the good.Consider the demand function for processed pork in Canada, Q. = 590.00 – 36p + 20p, + 3p. + 0.002Y The supply function for processed pork in Canada is: Q. = 442.00 + 52p - 60p, p is the price of pork Pn is the price of beef = $4 per kg Q is the quantity of pork demanded Po is the price of chicken = $3 per kg (measured in millions of kg per year) Y is the income of consumers = $12,500 Ph is the price of a hog = $1.50 per kg Solve for the equilibrium price and quantity for pork. The equilibrium price of pork is $and the equilibrium quantity of pork is million kg per year. (Enter numeric responses using real numbers rounded to two decimal places.) étv MacBook Air DII DD 80 F8 F9 F10 F2 F3 F4 F5 F6 F7Both the supply and the demand for crude oil seem to be price inelastic. It implies that changes in the price of crude oil have a relatively small effect on the quantity demanded or supplied. On the demand side, people as well as businesses tend to continue using oil products even after its price increases, as there are often few substitutes in the short run. That is why there is still growing demand for crude oil. On the supply side, it is difficult as well as expensive for the producers to quickly increase or stop oil production as a response to price changes. Therefore, even after a price rise, the supply is not enough to meet demand. It implies that any given change in supply or demand is likely to have a comparatively large effect on the equilibrium price than on the quantity of crude oil (the percentage change in the price will be higher than the percentage change in quantity). Draw a graph to show the information above
- Ethanol, a fuel, is made from corn. Ethanol production increased 9.1 times from 2000 to 2019 (https://ethanolrfa.org/statistics/annual-ethanolproduction/). What effect did this increased use of corn for producing ethanol have on the price of corn and the consumption of corn as food? 1.) Use the line drawing tool to draw either a new demand curve (D₂) or a new supply curve (S₂) that shows how the increased use of corn for producing ethanol affects the market for corn as food. Properly label this line. 2.) Use the point drawing tool to indicate the new market equilibrium. Label this point 'e₂'. Carefully follow the instructions above, and only draw the required objects. $, price of corn Q₁ Q, quantity of corn as food S₁ D₁You are the Economic Consultant for Zuku Farms Ghana Limited. Zuku produces cowpea in a community where producers are able to switch back and forth between cowpea and groundnut depending on market conditions. Consequently, you were tasked by the management of Zuku and you estimated the demand function for cowpea as follows: where is the quantity of cowpea demanded in bags per month, is the average price of cowpea in Ghana Cedis, is the average price of groundnut in Ghana Cedis, and Y is the income of consumers. Assuming is initially GH¢31.00 per bag, Y is GH¢1001.50. Also that your estimated supply function for cowpea is as follows: QS = -25 + 3.5PC -1.5Pf – 0.5Pg + 0.25R Where Qs is the quantity supplied of cowpea in bags, Pc and Pg are as defined above, Pf is the price of fertilizer per bag, R is the amount of rainfall (in inches). If Pf = GH¢10, R= 40 inches and Pg= GH¢31.00 Find the resulting supply function for cowpea and determine the equilibrium price and quantity.…Suppose the estimated supply function for avocados is given by QS = 48 + 15p – 10pf , where pf is the price of fertilizer. The estimated demand for avocados is given by Qd = 233 - 40p + 5pt , where pt is the price of tomatoes per pound. Solve for the initial equilibrium price and quantity of avocados if the price of fertilizer, pf ,is equal to $0.35 per lb. and price of tomatoes, pt, is equal to $0.80 per lb. Solve for the new equilibrium price and quantity of avocados if the price of fertilizer, pf , increases to $0.90 per lb. and price of tomatoes, pt, remains $0.80 per lb. Use these equilibrium values from parts a. and b. to solve for the price elasticity of demand for avocados. Given your calculations, are avocados elastic, inelastic or unit-elastic? Have total expenditures on avocados increased, decreased, or not changed as a result of the change in the price of fertilizer?