Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 4, Problem 10P
To determine
Reason behind raising the price in case of market shortage and why would consumer accept it?
Concept Introduction:
Market shortage refers to a situation in which quantity demanded of the good is greater than the quantity supplied.
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QUESTION 7
The demand for rubber erasers consists of two components. The first component is the demand for rubber erasers by art students. This demand is given by QA = 19,500 -
325P. The second component is the demand for rubber erasers by all others. This demand is given by Qo = 32,000 - 2,000P.
(a) What is the total quantity demanded of rubber erasers if the price of an eraser is:
(i) $10
(ii) $15
(iii) $20
(iv) $30
(v) $70
(b) Assume that the supply of rubber erasers is given by Qs = 14,000+ 175P.
(i) Find the equilibrium price and the equilibrium quantity.
(ii) Calculate the total consumer surplus. [Hint: It may be easier if you calculate the consumer surplus for art students and the consumer surplus for all others
separately, and then add them up.]
(c) Assume that the supply of rubber erasers is given by Qs = 8,390 + 180P. Find the equilibrium price and the equilibrium quantity.
10 (DC)
EN510
L. At a price of $2.28 per bushel, the supply of barley is 7, 500 million bushels and
the demand is 7,900 million bushels. At a price of $2.37 per bushel, the supply
of barley is 7,900 million bushels and the demand is 7, 800 million bushels.
(A) Find a price-supply equation of the form p ma+ b.
(B) Find a price-demand equation of the form p mx+ b.
(C) Find the equilibrium point.
PRICE (Dollars per box)
50
45
40
35
30
25
15
10
5
0
0 60 120 180 240 300 360 420 480 540 600
QUANTITY (Millions of boxes)
In this market, the equilibrium price is $
Price
(Dollars per box)
15
+
35
Demand
True
Supply
O False
Market for Michigan Blueberries
Quantity Demanded
(Millions of boxes)
Price
(Dollars per box)
Quantity
Demanded
(Millions of boxes)
For each of the prices listed in the following table, determine the quantity of blueberries demanded, the quantity of blueberries supplied, and the
direction of pressure exerted on prices in the absence of any price controls.
per box, and the equilibrium quantity of blueberries is
Quantity Supplied
(Millions of boxes)
True or False: A price ceiling below $25 per box is a binding price ceiling in this market.
15
Pressure on Prices
348
Quantity Supplied
(Millions of boxes)
million boxes.
180
Because it takes six to eight years before newly planted blueberry plants reach full production, the supply curve in the short run is almost…
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