Find the equilibrium in the following single market models (equilibrium consists of ordered pair(s) of (P*,Q)). Use fractions rather than decimals.
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- Which of the following could be considered a weakness of traditional comparative statics analysis? It is limited to analysis in competitive markets. O It is incapable of handling multiple variables. O It assumes that variables move smoothly from one equilibrium to another. O It focuses on changes to exogenous variables but not endogenous variables. O More than one of the above.In the Cournot equilibirum, what is the market price and units produced by firm 1 and firm 2?One of the pandemic measures adopted by the city of Regina consists of a food-delivery fee cap (maximum fee) of 14% of the pre-tax order price. This fee is charged by delivery services such as Uber Eats, DoorDash, and Skip the Dishes. Some restaurants in the city argue that the cap (in percentage terms) is to high due to the small profits earned in this industry. Represent graphically the equilibrium in the market for food (restaurants) in the city in the absence of any interventions
- The figure depicts the market for shoes. Suppose that a less expensive material for making shoes is developed. What effect will this event have on supply and demand in the shoe market? Demonstrate your answer graphically. Instructions: Use the tool provided "New line" to draw either a new demand or supply curve that reflects the market effect of this event. Plot only the endpoints of the line. if a less expensive material developed, the- will-. This will cause the equilibrium price to- and the equilibrium- quantity to-Assume that the Clothing brands J. and GulAhmed are two competing brands in Karachi. With the arrival of the winter season, GulAhmed announces a 30% discount on all products. Using ‘Comparative Statics Analysis’ of demand and supply model: a. Explain how the managements of the both brands will study the short-run and long-run impact on the sale of cloths, after the announcement of discount on all products in the Cloth market? b. Demonstrate and explain, with clearly labelled two panel diagrams, the ‘Rationing Function’ and the Allocating or ‘Guiding Function’ of Price.Quèstion 13 Suppose that the price changed from P1 to P2 in the graph below. Sdomestic A P1 G H P2 B K Ddomestic Q1 QO Q2 Using capital letters and reading from left to right and top to bottom (e.g. AGH or HELJK identify the following: Total variable production cost of producing Qo units (at price P1): New variable production cost of producing Q1 units (at price P2): Change in total variable production from reducing production for Qo to Q1
- Answer b and c Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1 Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) a. Determine the company’s total profit function. Also, (i) What are the profit maximizing levels of price and output for the two markets? (ii) Calculate the marginal revenues in each market. b. Now consider two cases: (i) Company is effectively able to price discriminate in thetwo markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging thesameprice in the two markets what are the profit maximizing levels of price,output, and the total profits? c. Analyze,…Demand and supply.2. Use the process of comparative statics to analyse the following changes in market conditions for the pizza market in a capital city (Hint: You are analysing general market condition assuming a competitive market). a) There is a general increase in consumer income. [assume pizza is a normal good] b) There is a fall in the price pastry ingredients used to make pizza by 25%.Elasticity.3. You are in the food truck industry in a capital city. You discover a new way to organise the preparation of ingredients that decreases the cost and increases the number of serves per day. You believe this will enable the business to reduce the price of a serve of curry from $20 to $15. It is estimated that the price elasticity of demand for food truck cuisine is 1.9. What will happen to total revenue if the price of a curry per serve is decreased? Should you decrease the price of the currywith the help of graph , show how these following changes are going to affect the market equilibrium . considering the shifting factors of KFC food chain supply (a) there are now better food ordering apps, with 50% less than before delivery charges.
- QUESTION 1: Assume Tea brands ChotooChai and BaraChai are competing brands in the market. With arrival of winter season, ChotooChai announces good promotional deals. Using ‘Comparative Statics Analysis’ of demand and supply model: How will the managements of the two brands study the short-run and long-run impact on Tea Sales, after the announcement of promotions in the market of Tea? Demonstrate and explain, with clearly labelled two panel diagrams, the ‘Rationing Function’ and the Allocating or ‘Guiding Function’ of Price. QUESTION 2: Demand for Orange Juice is given as Qd = 5000 – 2500 P + 1200 I + 650 E – 255 Ps Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps = Rs 25. Find the Demand Equation. Using the demand function from part a., Calculate Elasticity of Demand for price range of Rs.125 and Rs.155. What will be the ‘Price Elasticity of Demand’ at P = Rs.125? Interpret the Elasticity of Demand calculated in (C) above.in the Fall of 2020, international demand for U.S. grains grew, pushing up the prices for grains. Indeed grain prices grew nearly 50% in the last 6 months. Your task as an analyst is to analyze the changes in the market for corn. Using a graph, depict the changes that took place in the corn market. Clearly show and explain any shifts in demand and/or supply curves. Label any shifted curves as D1 and/or S1. If the curves have not shifted, please explain why. Clearly show the new market equilibrium. Label the new equilibrium price as P1 and equilibrium quantity as Q1Macmillan Learning International Trade - End of Chapter Problem The majority of fresh fruit consumed in the United States is now imported, much of it coming from Mexico, Chile, Guatemala, and Costa Rica. The proportion of fruit that is imported increased from 23% in 1975 to 53.1% in 2016. Much of this increase can be attributed to a reduction in transportation costs associated with improved roads and storage technology that has occurred over time. a. In the accompanying graph, shift the price line to illustrate the impact of imports on the market for fruit in the United States. Price (S per pound) 10 X Incorrect 9 8 00 10 3 2 Domestic Supply 1 Price 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity (billions of pounds of fruit) B Domestic Demand b. The price in the domestic market without trade is $5 per pound. The price of imported fruit at the world price is $4 per pound. As a result of trade, the United States imports 4 billion pounds of fruit. c. In the graph, place…