3. When the price of a certain product is $40, 25 items can be sold. When the price of the sameproduct costs $20, 185 items can be sold. On the other hand, when the price of this productis $40, 200 items will be produced. But when the price of this product is $20, only 100 itemswill be produced. Use this information to find supply and demand functions (assume forsimplicity that the functions are linear), and compute the consumer and producer surplus atthe equilibrium price.

To find the supply and demand functions, let's denote the quantity demanded as Qd and the quantity…

Answered: 3. When the price of a certain product…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 25P

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Similar questions

As a general rule, is it safe to assume that a change in the price of a good will always have its most significant impact on the quantity demanded of that good, rather than on the quantity demanded of miller goods? Explain.
Using the midpoint formula for calculating the elasticity of supply, if the price of a good rose from $95 to $105, what would be the elasticity of supply if the quantity supplied changed from a. 38 to 42? b. 78 to 82? c. 54 to 66?
If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?
What is consumer surplus? How is it illustrated on a demand and supply diagram?
What does a downward-sloping demand curve mean about how buyers in a market will react to a higher price?
only typed answer Q1 Assume that the demand curve D(p) given below is the market demand for widgets: Q=D(p)=1291−14pQ=D(p)=1291-14p, p > 0 Let the market supply of widgets be given by: Q=S(p)=−5+10pQ=S(p)=-5+10p, p > 0 where p is the price and Q is the quantity. The functions D(p) and S(p) give the number of widgets demanded and supplied at a given price. What is the equilibrium price? Please round your answer to the nearest hundredth. What is the equilibrium quantity? Please round your answer to the nearest integer. What is the total revenue at equilibrium? Please round your answer to the nearest integer.
3. Suppose that annual demand in the U.S. market for ice cream cones can be expressed as QD = 800 + .2I - 100P, where QD is the number of cones demanded in millions of cones, I equals average monthly income in dollars, and P is price in dollars per cone. Supply can be expressed as QS = 200 + 150P (with the same units for quantity and price). A. Graph the demand and supply curves for ice cream cones, assuming that average monthly income is $2,000, and solve for the equilibrium price and quantity. B. Now assume that average monthly income drops to $750 and supply is unchanged. Draw the new demand curve on the same graph as used in (a) above and solve for the new equilibrium price and quantity. How would you describe the shift in demand intuitively
true or false with reasoning. 1) ______In general, the larger the proportion of consumer’s income spent on a product, the smaller is price elasticity of demand 2) -----if a supply curve is linear and it intersects the price axis, the curve is elastic. Support your answer mathematically. Hint: write an equation of a supply curve that intersects the price axis in the general form and go from there. 3) ______Restaurants might offer a free drink with a purchase an appetizer because of the relatively low elasticity of demand in their industry.
6) a. Given that f is a differentiable function of x, show that the following notation of elasticity of a function El(f) = d(ln(f))/dx / d(In x)/dx corresponds with the definition of elasticity of a function f.b. Given that f and g are differentiable functions of x, prove that the elasticity of the product,Elx(f/g) = Elx(f) − Elx(g)c. Using part (b) above or otherwise calculate the following elasticity with respect to x, Elx (x−1/x5+1)
No written by hand solution Suppose that Sam and Teresa are the only consumers of dance classes in a particular market. The following table shows their annual demand schedules: Price Sam's Quantity Demanded Teresa's Quantity Demanded (Dollars per class) (Classes) (Classes) 10 32 56 20 20 40 30 12 24 40 4 12 50 0 4 On the following graph, plot Sam's demand for dance classes using the green points (triangle symbol). Next, plot Teresa's demand for dance classes using the purple points (diamond symbol). Finally, plot the market demand for
Suppose that the market demand for Turkey is given by: Q_(T)=2-8P_(T)+2P_(C)+0.0015I Where Q_(T) is annual quantity demanded of turkey in million pounds, P_(T) is the price of turkey per pound, P_(C) is price of chicken per pound, and I is the average household income in dollars per year. a. Find the annual quantity demanded of turkey if the price turkey is $2.00 per pound, price of chicken is $1.50 per pound and the annual household income is $30,000.
Q3. Assume that the demand curve D(p) given below is the market demand for widgets:Q=D(p)=2372−19p, p > 0 Let the market supply of widgets be given by:Q=S(p)=−3+6p, p > 0 where p is the price and Q is the quantity. The functions D(p) and S(p) give the number of widgets demanded and supplied at a given price.What is the equilibrium price? Please round your answer to the nearest hundredth.What is the equilibrium quantity? Please round your answer to the nearest integer.What is the price elasticity of demand (include negative sign if negative)? Please round your answer to the nearest hundredth.What is the price elasticity of supply? Please round your answer to the nearest hundredth

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