Suppose the demand and supply equations for a particular good are given as follow: QD - 140 - 2P and Qs - 4P - 10. The market for this good is currently in equilibrium
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(Q.3.3.) Suppose the
(Q.3.10) At the current market
At the current market price, the market outcome_______________The current market price__________________the efficlent price, and the current quantity traded___________the efficient quantity.
(Please explain the response. Do not simply provide an answer. Thank you.
Option choices are:
is efficient, is equal to, is greater than, is inefficient, or is less than than.)
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- Q2 =210- P. Oč = 2P. -0.5P, where Qc is the quantity of coffee in hundreds of pounds, Pc is The market for coffee is characterized by Q? =210 - P, the price per hundred pounds of coffee, and Pr is the price per hundred pounds of tea. The market for tea is characterized by and Of = 2P, -0.5P. In general equilibrium, the equilibrium quantity of tea is pounds] , where Qr is the quantity of tea in hundreds of pounds.“The laws of supply and demand indicate that higher prices are ineffective in reducing smoking. In particular, higher cigarette prices will reduce the demand for cigarettes. This reduction in demand will push the equilibrium price back down to its original level. Since the equilibrium price will remain unchanged, smokers will consume the same number of cigarettes.” Do you agree or disagree with this view?Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. Discuss the impact of the good harvest on each of the three markets. Discuss the effect on the markets for each of the three products if the government implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers and whiskey producers?
- Consider the market for the normal good Corn Flakes. Assume the supply and demand curves have normal (i.e. consistent with the laws of supply and demand) slopes. The market is currently in equilibrium. In each of the following situations indicate what will happen to the price of Corn Flakes and the quantity sold in the market. Each situation described below is a separate situation and should be treated independently. (I.e., Will the price of Corn Flakes increase, decrease, or not change? Will the quantity of Corn Flakes sold in the market increase, decrease, or not change? Diagrams are not necessary in your answer. I am only asking for the final results. That is what happens to price and quantity sold after each of the following events as described occurs.) a. The price of Rice Krispies and Fruit Loops both decrease. Corn Flakes price will ________ and quantity sold will _____________ b. Consumer disposable income increases significantly as a result of an income tax…Suppose the market demand for shirts is given by Qd = 300 – 20P and the market supply for shirts is given by Qs = 20P – 100, where P = price (per shirt). i. Graph the supply and demand schedules for shirts between price = $5 through to $15 (increase in units of 1, i.e. 5, 6, 7…). ii. Using the equations provided, in equilibrium, how many shirts would be sold and at what price? iii. What would happen if suppliers set the price of shirts at $15? Explain the market adjustment process.(a) Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption.(i) Discuss the impact of the good harvest on each of the three markets.(ii) Discuss the effect on the markets for each of the three products if thegovernment implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers,rum producers and whiskey producers? (b) Identify a newspaper article that illustrates a market failure in Barbados. NOTE: Only the following market failures should be examined: public good,asymmetric information, positive or negative externality.(i) Provide a brief summary of the main points in the article. (Maximum 30 words)(ii)Identify the type of…
- Question 1 Consider a rice farmer planting two (2) types of rice, white and brown rice, concurrently in his rice field using the same resources and technology and harvesting them at the same time. Given that consumers like to mix both white and brown rice in their daily consumption, explain the effect on the white rice market when the price of brown rice increases. Support your answers with suitable white rice market diagrams. Consider a farmer that produces both white and brown rice. It is discovered that the demand for brown rice is relatively more inelastic compared to the demand for white rice. Initially the price of both white and brown rice is the same and the farmer produces the same quantity of white and brown rice. Now there is an improvement in agricultural technologies that affect both white and brown rice equally. Employ the demand and supply model to compare and contrast the effects on the equilibrium price and quantity of both white and brown rice…As you now know, we are considering entering the tomato sauce market. We have continued our research and now better understand consumer demand for our jars of sauce as: D(p) = -3p+25 We are prepared to supply: S(p) = 2p-4 In this question, assume that the equilibrium price and quantity are given by: P∗ and Q∗ What is the consumer's surplus at $4?Suppose the equilibrium price of milk is $3 per gallon but the federal government sets the market price at $2 per gallon. The result will be: excess supply excess demand surplus shorting the market QUESTION 29 Suppose your utility function for food and clothing is (F,C)= 2F+4C. If you reduce your food consumption by 2 units, how much do you have to increase your clothing consumption in order to maintain the same utility level? 1 unit 00 2 units 4 units 8 units QUESTION 30 The aggregate demand for good X is Q = 20 - P, and the market price is P = $8. What is consumer surplus at this price? $72 $96 $144 $168
- The demand and supply functions for two independent goods are given by: QD₁ = 502P₁ + P₂ and QD2 = 10 + P₁ - 4P₂ Qs1 = -21 + P₁ and Qs2 = -10 + 5P₂ Show that in equilibrium: R=2 Find the equilibrium prices.The following are market demand and supply equations for a perfume product: QD = 70 – 4P %3D Qs = 10 + 2P where P is, Qp and Qs are quantity demanded and supplied of perfume, respectively. A) What is the equilibrium price and quantity? Calculate using the arithmetic method. B) Draw demand and supply curves for prices £0, £4, £6... £16. C) Suppose consumers' income increases and perfume is considered as a normal good. As a result, the new demand equation is Qp = 100 – 4P. Find the new equilibrium price and ntity of perfume. D) Your economist friend told you that because of the change in demand described in part (c), price elasticity of demand changed. Is your friend right? Explain. E) Use the demand equation in part (c) to compute price elasticity of demand between £5 and £6. Use the mid-point (arc) method.Consider two markets: the market for coffee and the market for hot cocoa. The initial equilibrium for both markets is the same, the equilibrium price is $5.50, and the equilibrium quantity is 37.0. When the price is $8.75, the quantity supplied of coffee is 69.0 and the quantity supplied of hot cocoa is 101.0101.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for hot cocoa. Please round to two decimal places.
