Copyright 2815. Lexington Books. All rights reserved. May not be repreduced in a 2.6 iscuss the uf California wine. 2.7 The market demand for Brand x has been estimated ast Q=1,500-3P-0.05M 2.5P +7.5P y where P, is the price of Brand x. M per capita incom, P, the price of Brand y, and P. the price of Brand z. Assume that P =2, M $20,000, P $4, and P. $4. a. With respect tu changes in per capila income, w at kind of good is Brand x? x b. How are Brands x and y related? EBSCO eBook Collection (EBSCOhost) printed on 8/20/2019 7:18 AM via SHRI ATA VAISHNO DEVI UNIVERSITY AN: 935122 Webster, Thomas J.; Managerial Economics Tools for Analyzing usiness Strategy Account: ns176013.main.ehost ion from the publisher. except fair uses permitted under U.S. or applicable copyright law. Demund and Supply 51 C. How are Brands x and z related? d. How are Brands z and y related? e. What is the market demand for Brandx! 2.8 Yell- Yew-Boats, Ltd. produccs Blue Mcanics. Consider the demand and supply equations for Blue Meanies: O150-2P +0.00.LM+1.5P Q=60+ 4P-2.5W, where Q is munthly per family consumption of Blue Meanies, P, the price per unit of Blue Meanies, M median annual per family income ($25,000), P, the price per unit of Apple Bonkers ($5.00) and W the hourly per worker wage rate ($8.60). a. W at type of good is Apple Bonkers? b. W at are the equilibrium price and quantity of Blue Meanies? c. Suppose that median per family income increases by $6,000. What are the new equilibrium price and quantity of Blue Meanies? d. Su pose that in addition to the increase in median per family income, collective bargaining by Bluc Mcanic Local # 1 results in a $.40 hourly increase in the wage rate. What are the new equilib- rium price and quantity? e. Ina same diagram, illustrate your answers to parts b, c, and d.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter4: Demand And Supply: Applications And Extensions

Section: Chapter Questions

Problem 15CQ

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Question number 2.7 and 2.8

Transcribed Image Text:Copyright 2815. Lexington Books. All rights reserved. May not be repreduced in a 2.6 iscuss the uf California wine. 2.7 The market demand for Brand x has been estimated ast Q=1,500-3P-0.05M 2.5P +7.5P y where P, is the price of Brand x. M per capita incom, P, the price of Brand y, and P. the price of Brand z. Assume that P =2, M $20,000, P $4, and P. $4. a. With respect tu changes in per capila income, w at kind of good is Brand x? x b. How are Brands x and y related? EBSCO eBook Collection (EBSCOhost) printed on 8/20/2019 7:18 AM via SHRI ATA VAISHNO DEVI UNIVERSITY AN: 935122 Webster, Thomas J.; Managerial Economics Tools for Analyzing usiness Strategy Account: ns176013.main.ehost

ion from the publisher. except fair uses permitted under U.S. or applicable copyright law.
Demund and Supply
51
C. How are Brands x and z related?
d. How are Brands z and y related?
e. What is the market demand for Brandx!
2.8 Yell- Yew-Boats, Ltd. produccs Blue Mcanics. Consider the demand
and supply equations for Blue Meanies:
O150-2P +0.00.LM+1.5P
Q=60+ 4P-2.5W,
where Q is munthly per family consumption of Blue Meanies, P, the
price per unit of Blue Meanies, M median annual per family income
($25,000), P, the price per unit of Apple Bonkers ($5.00) and W the
hourly per worker wage rate ($8.60).
a. W at type of good is Apple Bonkers?
b. W at are the equilibrium price and quantity of Blue Meanies?
c. Suppose that median per family income increases by $6,000. What
are the new equilibrium price and quantity of Blue Meanies?
d. Su pose that in addition to the increase in median per family
income, collective bargaining by Bluc Mcanic Local # 1 results in
a $.40 hourly increase in the wage rate. What are the new equilib-
rium price and quantity?
e. Ina same diagram, illustrate your answers to parts b, c, and d.

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