uppose that in 2007 Ford sold 500,000 Mustangs at an average price of $18,800 per car; in 2008, 600,000 Mustangs were sold at an average price of $19,500 per car. From these statements what changes in supply or demand on the market for Mustangs produced such changes in equilibrium? (One graph. Start by plotting two points (price versus quantity, shift either supply or demand, not both) and then draw supply and demand graphs through them in a way that explains the change in the equilibrium from 2007 to 2008.
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Suppose that in 2007 Ford sold 500,000 Mustangs at an average price of $18,800 per car; in 2008, 600,000 Mustangs were sold at an average price of $19,500 per car. From these statements what changes in supply or demand on the market for Mustangs produced such changes in equilibrium? (One graph. Start by plotting two points (price versus quantity, shift either supply or demand, not both) and then draw supply and demand graphs through them in a way that explains the change in the equilibrium from 2007 to 2008.
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- The following table shows the weekly demand and supply in the market for ice cream in Detroit. dy Tools Price Quantity Demanded Quantity Supplied (Dollars per gallon of ice cream) (Gallons of ice cream) (Gallons of ice cream) 4 2,000 200 Tips 1,600 600 12 1,200 800 Tips 16 800 1,200 20 400 1,800 כ On the following graph, plot the demand for ice cream ușing the blue point (circle symbol). Next, plot the supply of ice cream using the orange point (square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for ice cream. g Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 24 Demand 20 16 Supply 12 MacBook Air per gallon of ice cream)How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is do price and quantity rise, fall, remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? Use supply and demand diagrams to verify your answers on the graph provided below. Label all axis including demand and supply. (See PPT slides #3-56, #3-58~#3-60, how to do it.) 15. a. Supply decreases and demand is constant. EI provide as an example for you to solve others. P S' Conclusion from D constant & SJ: S e2 Pe2- Price increases (P↑), and Quantity may decrease (QJ). e1 Pel Qe2 Qel b. Supply increases and demand decreases, simultaneously. E Now you provide D & S graphs. S Conclusion from DJ & S↑: Price (Р ), and Pe Quantity (Q_). e So (price, quantity) is indeterminate. Qe с. Demand increases and supply decreases, simultaneously. S Conclusion from D↑ & S]: Price (Р ), and Quantity (Q_). Pe e So…The following table shows the annual demand and supply in the market for shoes in Miami. Price (Dollars per pair of shoes) 20 40 60 80 PRICE (Dollars per pair of shoes) 120 100 20 On the following graph, plot the demand for shoes using the blue point (circle symbol). Next, plot the supply of shoes using the orange point (square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for shoes. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 0 100 0 Quantity Demanded (Pairs of shoes) 1,100 900 800 200 600 500 400 600 800 QUANTITY (Pairs of shoes) Quantity Supplied (Pairs of shoes) 200 400 500 900 1000 1,200 1200 O Demand Supply Equilibrium
- How shifts in demand and supply affect equilibrium Consider the market for pens. Suppose that the number of students with an allergy to pencil erasers increases, causing more students to switch from pencils to pens in school. Moreover, the price of plastic, an important input in pen production, has dropped considerably. On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Scenario 1DemandSupply012345678910109876543210PRICE (Dollars per pen)QUANTITY (Millions of pens)Demand Supply Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1 graph. Scenario 2DemandSupply012345678910109876543210PRICE…According to the Australian Wool Innovation, severe drought conditions in Australia contributed to the lowest level of wool production in 50 years. This record low production has driven up prices sharply in Australian wool markets. Meanwhile, the price of raw cotton increased significantly for the first time in many years. a. Illustrate this observation with one demand and supply graph for the market for Australian wool and another demand and supply graph for raw cotton. b. Make sure that your graphs clearly show (1) the initial equilibrium before the decrease in the supply of Australian wool and (2) the final equilibrium. c. Use arrows to indicate any shifts in the demand and supply curves for each market. d. Label your graphs fully and write an explanation of your work.Suppose we are analyzing the market for hot chocolate. Graphically illustrate the impact each of the following would have on demand or supply. Also show how equilibrium price and equilibrium quantity would change. A) The price of whipped cream falls. B) A better method of harvesting cocoa beans is introduced.
- Suppose we are analyzing the market for hot chocolate. Graphically illustrate the impact each of the following would have on demand or supply. Also show how equilibrium price and quantity have changed. Consumer income falls because of a recession and hot chocolate is considered a normal good. Producers expect the price of hot chocolate to increase next month. Currently, the price of hot chocolate is $0.50 per cup above equilibrium.Suppose the supply of a good is given by the equation Q = −6+2P and the demand for the good is given by the equation QD = 14 - 2P, where quantity (Q) is measured in millions of units and price (P) is measured in dollars per unit. The equilibrium quantity in this market is 4 million PRICE (Dollars per unit) the following graph, plot the demand curve using the blue line (circle symbol) and plot the supply curve using the orange line (square symbol). Then place the black point (plus symbol) at the equilibrium price and quantity. Dashed drop lines will automatically extend to both axes. 10 9 8 7 2 1 0 0 1 2 3 4 5 6 7 QUANTITY (Millions of units) 8 units and the equilibrium price is 9 10 Demand Supply $5. EquilibriumConsider the market for baseball bats below (and assume it can be analyzed in our typical supply/demand framework). If the price of ash (the kind of wood used to make baseball bats) increases, the market equilibrium price of bats will increase and the equilibrium quantity will decrease. You should think about what this would look like on the graph above (i.e., with appropriate shift (or shifts)). Suppose an analyst for “Baseball World" argues that because the price of bats has risen, people will buy fewer units, and this will cause the equilibrium price to decrease again. This analyst is Group of answer choices a) correct because otherwise there would be a shortage in the market. b) incorrect because people buying fewer is a movement along the demand curve (not a leftward shift) in this case because buyers are reacting to the increase in price. c) correct because otherwise there would be a surplus in the market. d) incorrect because actually “people buying fewer” will…
- Suppose the demand and supply curves for rice in Japan are given by the following equations: QD = 120 - 30P QS = 40 + 10P Where QD = million tons of rice the Japanese would like to buy each year; QS = million tons of rice Japanese farmers would like to sell each year; and P = price per ton of rice (in hundreds). Fill in the following table: Use the information in the table to find the equilibrium price and quantity. Graph the demand and supply curves and identify the equilibrium price and quantity.Cassava is the main commodity in the economy of Makandingi. Given the hardship in the economy, the government increased the salary of all employees in Makandingi. Following this intervention, the number of cassava producers also increased in the community. In a class discussion, Barnabas said these two events would result in an increase in equilibrium price of cassava. Francis, on the other hand, argued that the price would rather decrease. With the aid of a diagram, explain the possible effects of the two events on equilibrium price and quantity, assuming the salary increase has a greater impact and cassava is a normal good.Problem 3-5 (Algorithmic] The demand and supply for a particular commodity are given by the following two equations: Demand: P = 12 – 0.2Qd and Supply: P = 2 + 0.2Qs Where Qd and Qs are quantity demanded and quantity supplied, respectively, and P is price. Using the equilibrium condition Qs = Qd, determine equilibrium price and equilibrium quantity. Equilibrium price = $O Equilibrium quantity = Ounits Graph the two equations to substantiate your answer. Instructions: 1. Use the line tools Qd and Qs to draw the demand and supply curves for P = 2 and 12. 2. Use the drop line tool E to identify the equilibrium quantity and price. 14 Тools 12 Qd 10 2 10 20 30 40 50 Quantity