Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 3, Problem 5.8P
Subpart (a):
To determine
Illustration of
Subpart (b):
To determine
Illustration of changes in equilibrium point.
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Students have asked these similar questions
A recent study found that the demand and supply schedules for financial calculators are as
follows:
Price/calculators
Quantity Demanded
Quantity Supplied
20
160
40
40
140
60
60
120
80
80
100
100
100
80
120
120
100
Co
an Coll
80
60
40
D.
20
40 60
80 100 120 140 160
a) Determine:
Price of Equilibrium_
and Quantity of Equilibrium
b) Determine the effect of $60 Price Ceiling.
Is it binding? Why?
Will it cause Shortage or Surplus? And by how much?
c) Determine the effect of $120 Price Floor.
Is it binding? Why?
Will it cause Shortage or Surplus? And by how much?
Market researches have studied the market for milk,and their estimates for the supply of and the demand for milk per month are as follows:a.Using the data,graph the demand for and the supply for milk.Identify the equilibrium point as E,and use dotted lines to connect E to the equilibrium price onthe price axis and the equilibrium quantity on the quantity axis.b.Suppose the government enacts amilk price support of $8per gallon.Indicate this action on your graph,and explain the effect on the milk market?Why would the government establish such a price support?c.Now assume the government decides to set a price ceiling of $4 dollar per gallon.Show and explain how this legal price effects your graph of the milk market.What objective could the government be trying to achieve by establishing such a price ceiling?
I can seem to figure out the last two questions I bolded:
Why does the demand curve slope downward? Why does the supply curve slope upward? Given the demand and supply schedules below:
Price (dollars per CD)
Quantity Demanded (per day)
Quantity Supplied (per day)
5.00
300
100
6.00
250
150
7.00
200
200
8.00
150
250
9.00
100
300
What is the market equilibrium?
If the price of CD is $6.00, describe the situation in the CD market. Explain how market equilibrium is restored.
A rise in incomes increases the quantity of CDs demanded by 100 a day at each price. What is the new equilibrium and how does the market adjust?
A rise in the number of recording studios increases the quantity of CDs supplied by 75 a day at each price. People download more music from the Internet and the quantity demanded of CDs decreases by 25 a day at each price. With no change in incomes, what is the new equilibrium and how does the market adjust?
Chapter 3 Solutions
Principles of Economics (12th Edition)
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