Known functions of supply and demand for a product are: q = 50 (82 – 2p) and q = 82 (p - 2), where p = product price and q = number of products a. Specify the qo and po values of the above functions. b. Look for the value of Producers' Surplus and Consumers' Surplus in equilibirium conditions. c. Interpret the result of point b above, and describe your explanation of the result of point b above

Known functions of supply and demand for a product are: q = 50 (82 – 2p) and q = 82 (p - 2), where p = product price and q = number of products a. Specify the qo and po values of the above functions. b. Look for the value of Producers' Surplus and Consumers' Surplus in equilibirium conditions. c. Interpret the result of point b above, and describe your explanation of the result of point b above

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 1E: For each of the determinants of demand in Equation 2.1, identify an example illustrating the effect...

See similar textbooks

Similar questions

Q1) Given the Supply chain cost for a service is PKR 195 and the customer value is PKR 225. Determine supply chain surplus and consumer surplus.
The inverse demand function of a group of consumers for a given type of widgets is given by the following expression: π=−10q+2000 $ ( I ) where q is the demand and π is the unit price for this product. A. Determine the maximum consumption of these consumers. B. Determine the price that no consumer is prepared to pay for this product. C. Determine the maximum net consumers’ surplus. Explain why the consumers will not be able to realize this surplus. D. For a price π of 1000 $/unit, calculate the consumption, the consumers’ gross surplus, the revenue collected by the producers, and the consumers’ net surplus. E. If the price π increases by 20% (The new price π=1200), calculate the change in consumption and the change in the revenue collected by the producers. F. What is the price elasticity of demand for this product and this group of consumers when the price π is 1000 $/unit. G. Derive an expression for the gross consumers’ surplus. H. The supply function for the widget…
Using data on the market of a particular product, the following show the estimated demand and supply equations respectively Qd = 4,437.50 − 332.5P and Qs = 2,250 + 300P. If the new demand equation will be Qd′ = 6,123.75 − 458.85P I. What would be the new equilibrium price (round-up to 6 decimals)? J. How many of this product will be bought and sold at this new market price? Round-up to two decimals. K. List five factors that could be the reason for this change in demand
For each of the determinants of demand in Equation 2.1, identify an example illustrating the effect on the demand for hybrid gasoline-electric vehicles such as the Toyota Prius. Then do the same for each of the determinants of supply in Equation 2.2. In each instance, would equilibrium market price increase or decrease? Consider substitutes such as plug-in hybrids, the Nissan Leaf and Chevy Volt, and complements such as gasoline and lithium ion laptop computer batteries.
Suppose market demand and supply are given by Qd = 100 − 2P and Qs = 5 + 3P. The equilibrium quantity is:
1. Demand for grain is given by function Qd=9-4P and supply - by function Qs=2P. The government also entered the market and bought 6 units of the grain. Which equilibrium price will be established in this market and how much grain will be sold? 2. Price elasticity of demand and income elasticity of demand are accordingly -0,4 and 1,1. The changes in price and income accordingly amounted to 12% and -5%. Find the percentage change in quantity demanded. 3. Price elasticity of demand, last sale, last price, and initial price accordingly are -1,5; 20; 10; 40. Find the initial sale.
A manufacturer sells two related products, the demand for which is characterized by the following two demand functions: q1 = f1 (p1, p2) = 200 – 6p1 – p2 q2 = f2 (p1, p2) = 150 – p1 – 4p2 where pj equals price (in dollars) of product j and qj equals the demand (in thousands of units) product j. (a) How many units are expected to be demanded of each product if $18/unit is charged for product 1 and $36/unit is charged for product 2? (b) How many units are expected if the units price are $40 and $30, respectively?
An economic consultant for Gumbcorp. recently provided the firm’s marketing manager with this estimate of the demand function for the firm’s product: Qxd=12,000 -3Px + 4Py - 1M + 2Ax where Qxd represents the amount consumed of good X, Px is the price of good X, is the price of good Y, M is income, and Ax represents the amount of advertising spent on good X. Suppose good X sells for $200 per unit, good Y sells for $15 per unit, the company utilizes 2,000 units of advertising, and consumer income is $10,000. How much of good X do consumers purchase? Are goods X and Y substitutes or complements? Is good X a normal or an inferior good
Estimate the equlibrium price and quantity of the market whose demand and supply functions are pd =−(q + 4)2 + 100 and ps = (q + 2)2 respectively.
Identify the correct option According to the graph, at R60, the amount that is demanded is 100 units and the quantity produced is 180 units, suggesting that the quantity supplied outshines the total amount sought by 50 units. As a result of this, there is a 50-unit overproduction (surplus) of potatoes in the marketplace. It can be mathematically verified as:
Suppose market demand and supply are given by Qd=100-2P and Qs=5+3P. If a price floor of $30 is set, what will be the size of the resulting surplus?
Q2. 1-New technology introduced which reduces cost of producing of hybrid cars. Graph pre-market equilibrium and post-market equilibrium. 2- Importance of elasticity in decision making for consumers and producers, explain your concept by plotting separate graphs.