Supply and Demand and Question

Total Variable Cost = (Number of Workers * Worker’s Daily Wage) + Other Variable Costs

c. Explain how the location of each curve graphed in question 7b would be altered if (1) total fixed cost had been $100

15. In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is ( )

d. Calculate the price elasticity of demand in each market and discuss these in relation to the prices to be charged in each market.

4. demand is at its highest as long as product segments are within the circle

c) Explain how the location of each curve graphed in question 7b would be altered if (1) total fixed cost had been $100 rather than $60 and (2) total variable cost had been $10

3. Compare the financial results from Question 1 and 2 and highlight your observation regarding contribution. Based on your calculations, what is the relationship between volume and cost?

2.) Which curve(s) change and based on the lists in the text of what causes demand and supply to shift what are the causes of theses shifts? D1 changed moving leftward indicating a decrease in demand due to a technological change: a technological setback causes a decrease. This causes price to go down as well as the demand is lower.

9. If the demand for a good is perfectly price inelastic in the short run and the supply curve is upward sloping, imposing a sales tax on the good will

1) According to the Law of Demand, the demand curve for a good will A) shift leftward when the price of the good increases. B) shift rightward when the price of the good increases. C) slope downward. D) slope upward. Answer: C 2) An increase in the price of pork will lead to A) a movement up along the demand curve. B) a movement down along the demand curve. C) a rightward shift of the demand curve. D) a leftward shift of the demand curve. Answer: A 3) An increase in consumer incomes will lead to A) a rightward shift of the demand curve for plasma TVs. B) a movement upward along the demand curve for plasma TVs. C) a rightward shift of the supply curve for plasma TVs. D) no change of the demand curve for plasma TVs. Answer:

| | | | | | | | | | | | | |75000 | |100000 | |125000 | |150000 | |175000 | |200000 | | |  | |  | |  | |  | |  | |  | |Direct Labor |4.00 |  |3.90 |  |3.80 |  |3.70 |  |3.80 |  |4.00 | |Material |2.00

Explain how the demand curves for normal products and for prestige products differ, what are demand shifts and why are they important to marketers? How do firms go about estimating demand? How can marketers estimate the elasticity of demand?

Evaluate each of the following changes in supply and/or demand. How will each affect equilibrium price and quantity in a competitive market? Will price and quantity rise, fall, or be unchanged? Based on shifts, will the answers be indeterminate?

1. Analyze the fast food industry from the point of view of perfect competition. Include the concepts of elasticity, utility, costs, and market structure to explain the prices charged by fast food retailers.

a) Draw Brennan's average total, marginal revenue and marginal cost curves. (Hints: calculate total revenue (P* times Q) first, and then calculate MR)