2. The supply Qs = s(P, Pm) has the functional form of: Qs = -12 + 0.5P - 2Pm initially, the materials cost Pm_0 = 7. Find the optimal quantity to supply if the price is P=76 and P=80. At P=76, Q_0 = . At P=80, Q_0 = . 3. Now, the cost of materials changes to Pm_1 = 9. Find the optimal quantity to supply if the price is P=76 and P=80. At P=76, Q_1 = At P=80, Q_1 = Draw the second supply curve and show how supply shifted.

2. The supply Qs = s(P, Pm) has the functional form of: Qs = -12 + 0.5P - 2Pm initially, the materials cost Pm_0 = 7. Find the optimal quantity to supply if the price is P=76 and P=80. At P=76, Q_0 = . At P=80, Q_0 = . 3. Now, the cost of materials changes to Pm_1 = 9. Find the optimal quantity to supply if the price is P=76 and P=80. At P=76, Q_1 = At P=80, Q_1 = Draw the second supply curve and show how supply shifted.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter29: Resource Markets

Section: Chapter Questions

Problem 4E

See similar textbooks

Similar questions

I am given this question: The price p, in dollars, of a certain commodity and the quantity x sold obey the demand equation p = (−x/5)+200 where 0 ≤ x ≤ 1000 Suppose that the cost C, in dollars, of producing x units is C =(√x/10)+400. Assuming that all items produced are sold, find the cost C as a function of the price p. Is it safe to assume that this question has an issue since the cost C cannot be integrated into the price equation?
The function D(p)D(p) gives the number of items that will be demanded when the price is p. The production cost, C(x)C(x) is the cost of producing x items. To determine the cost of production when the price is $8, you would: A.Solve D(C(x))=8D(C(x))=8 B.Evaluate C(D(8))C(D(8)) C.Evaluate D(C(8))D(C(8)) D.Solve C(D(p))=8
You and your friends love to go fishing. There is a sporting goods store in your neighborhood that sells a fishing pole for $82 but costs the store $60, and a fully stocked tackle box that sells for $58 but costs $40. Assuming the mark-up policy is linear, determine the equation that relates price (P) to cost (C). Following this same mark-up policy for other items, what would be the price of a pair of waders which cost the company $80?
Predicting Changes in Equilibrium Price and Quantity Suppose that the market demand for farmed salmon is Qd = 12 – p and the market supply of farmed salmon is Qs = 9.6 + 0.5p – 0.2pt, where Q is the quantity of salmon in millions of tons per year, p is the price of salmon in dollars per pound, and pt is the price of tilapia in dollars per pound. The supply function demonstrates that the facilities that are used to farm salmon are also suitable for farming tilapia. a) Use a market diagram to demonstrate that the equilibrium price and quantity of salmon is implicitly a function of the price of tilapia. That is, show how a change in the price of tilapia will impact the market for farmed salmon. (No need to use numbers here, just sketch and explain.) b) Using the supply and demand functions, derive the relationship between the price of tilapia and the equilibrium price and quantity of salmon. You should ultimately calculate and . Check your work by calculating the impact of an increase in…
1.The price p in dollars of a certain commodity and the quantity x sold obey the demand equation p= -1/5x + 200 where 0<=x <=1000. Suppose that the cost C in dollars of producing x units is C= the square root of x divided by 10 + 400. Assuming that all items produced are sold, find the cost of c as a function of the price p.
A manufacturing business can supply 60 plasma TV sets per month at a price of $280 per set, or sell 140 plasma TV sets if the price is $370 per set. A group of retailers will buy 80 plasma TV’s if the price is $350 per pair and 120 plasma TV’s if the price is $300 per set. Given that the demand and supply functions must be linear: Find the linear equations representing both demand and supply Find the point of market equilibrium (number of TVs: q) and the price per unit (p) at that point.
The marketing department of a business has determined that the demand for a product can be modeled by p=2000−10x, where p is the price per unit (in dollars) and x is the number of units. The cost (in dollars) of a producing x units is given by C=2000+500x. What price will yield a maximum profit?
Assume that firm A is offered a supply of essential components by an outside supplier for a price less than the full cost of firm A making them. Explain why firm A might reject this offer.
Suppose the estimated supply function for avocados is given by QS = 48 + 15p – 10pf , where pf is the price of fertilizer. The estimated demand for avocados is given by Qd = 233 - 40p + 5pt , where pt is the price of tomatoes per pound. Solve for the initial equilibrium price and quantity of avocados if the price of fertilizer, pf ,is equal to $0.35 per lb. and price of tomatoes, pt, is equal to $0.80 per lb. Solve for the new equilibrium price and quantity of avocados if the price of fertilizer, pf , increases to $0.90 per lb. and price of tomatoes, pt, remains $0.80 per lb. Use these equilibrium values from parts a. and b. to solve for the price elasticity of demand for avocados. Given your calculations, are avocados elastic, inelastic or unit-elastic? Have total expenditures on avocados increased, decreased, or not changed as a result of the change in the price of fertilizer?
2.4 Water is produced and sold by the government. Demand for water is represented by the linear function Q=50-2P. The total cost function for water production is also a linear function: TC(Q)= 100+ 100. You will also need to work out both the average cost of production, denoted by AC(Q), equal to the total cost of producing a quantity of output divided by that quantity of output, TC(Q)/Q, and the marginal cost of production, denoted by MC(Q), which is the additional cost incurred to produce one more unit. a. What fee should the government charge per unit of water in order to reach the efficient allocation? b. How much should it charge if it wishes to maximize profit from the sale of water? C. What is the value of the efficiency loss that results from charging the price in part b rather than the price determined in part a?
The estimated monthly U.S. demand function for avocados isQ = 144 − 40p + 20pt where p is the price of avocados and pt is the price of tomatoes, a substitute for avocados. The estmated supply function is Q = 58 + 15p − 20pf where the price of fertilizer, pf , is $0.40, so the supply function can be written asQ = 50 + 15p. The initial price of tomatoes is $0.80 per lb. Using algebra, determine the initial equilibrium price and quantity of avocados, and then determine how price and quantity change if the price of tomatoes increases by $0.55 to $1.35
A commodity has a demand function modeled by p = 106 − 0.5x and a total cost function modeled by C = 30x + 33.75, where x is the number of units. (a) What unit price (in dollars) yields a maximum profit? $ per unit (b) When the profit is maximized, what is the average cost (in dollars) per unit? (Round your answer to two decimal places.) $ per unit