Part 1: Spatial Equilibrium The demand in market 1 is D, = 24 - P1 The supply in market 1 is S, = -2 + P, The demand in market 2 is D2 = 16 - P2 The supply in market 2 is S2 = 2 + P2
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If the cost of transportation between the two markets is Pt = 2, what would be the equilibrium values of D1, S1, P1, D2, S2, Qt, and Pt? Solve algebraically.
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- I would like to know just part d,e, and f. Thank you Suppose that the supply of tomato soup in a city is represented byQS = 100P – 10PT − 50where P is the price of tomato soup and PT is price of tomato needed to produce tomato soup. All prices are indollars and quantity is in liters.Assume that the current tomato price is $15.Suppose that the demand for the tomato soup is QD = 1000−60P + 0.3Iwhere P is the price of the tomato soup and I is a representative household’s income.Assume that at the equilibrium, income is $12000.a) What are the current equilibrium price and quantity of the tomato soup? Show the equilibrium on a detailedgraph.b) Suppose that income decreases to $10400. What is the new equation for the demand for tomato soup? Doesthis correspond to an increase or decrease in the demand for tomato soup? Show the effect of this event onthe equilibrium and the diagram you used in part (a)c) Start from the equilibrium in part a) and now suppose that the price of the tomato…Assume that the market price for beach towels increases considerably due to a worldwide shortage in the fabrics needed to produce them. Furthermore, suppose that some of these same fabrics are used in the production of bathing suits as well. Create a graphical depiction of the market for bathing suits (which are thought to be a complementary good to beach towels), making sure to indicate how the market will be impacted by the discussed changes. Make a conclusion about how the market price and equilibrium quantity of bathing suits will be affected.Normally, the people of COVID-FREE LAND demand of 3,000 sanitizers and 18,000 toilet rolls. Suddenly, there is an outbreak of COVID19 and the demand for sanitizers and toilet rolls has increased to 4,000 and 20,000, respectively. How would COVID-FREE LAND meet itsnew demand. Identify and comprehensively discuss at least three possibilities or ways. State all appropriate assumptions made.
- Suppose ManTown demand and supply curves for oil is given by ? = 500−4? ? = −100+6? a) Determine which one is the supply b) Calculate the equilibrium price and quantity c) Suppose that ManTown demand changes to ? = 600−4?.Find the new equilibrium price and quantity. e) Compare what happens to equilibrium quantities and prices in questions (b) and (c)? f) From equation (1), if the current price is 110, describe what happens to quantities and prices of demand and supply in this market?Assume that the equilibrium price is at $3 and equilibrium quantity is at 40 units of a product. Then, imagine that suddenly any of determinants of demand, other than the price of the product, caused demand to increase while, at the same time, one of determinants of supply, other than the price of the product, caused supply to decrease. TASK: First, draw the demand and supply graph to show the original equilibrium price at $3 and equilibrium quantity at 40 units. Second pick ONE specific DETERMINANT of DEMAND and ONE specific DETERMINANT of SUPPLY Third, show in the graph what it looked like if demand increased and supply decreased (select where you think that the new price and quantity would change to), what the new equilibrium price and equilibrium quantity would be, after both changes in demand and supply occurred. Fourth, in a couple of words, write down what would be YOUR new equilibrium price and equilibrium quantity. [That is, tell us that the original equilibrium price…Suppose that in the citrus market, while the amount of production decreased due to cold winter conditions, consumers' desire to drink citrus juice increased in order to strengthen their immunity due to the COVID-19 epidemic. In this case, how is the equilibrium price and quantity affected in the citrus market? Evaluate this with the help of the figure for the case where the supply curve shifts more than the demand curve. (Note: Do not forget to write the names of the axes while drawing the figure. Show clearly the supply-demand curve and the market equilibrium point in the first case and the supply-demand curve and equilibrium point after the shift.)
- When graphing a market, one of the key aspects to remember is that equilibrium occurs where supply equals demand. Therefore, you can find the equilibrium price and quantity by setting the supply and demand equations equal to one another. In this case, since domestic demand is P = 11.5 - Q and domestic supply is P = 5.5 + Q, you can find the equilibrium quantity as 11.5 – Q = 5.5 + Q. Solving for Q, you get 2Q = 6 or Q = 3 (which in this case equates then to 300 million bushels). Plugging that answer back into either the supply or demand equation, you find the equilibrium price (which is 8.5 or 85 yuan) or Rent in this case). This is the equilibrium point with no trade.With the application of the world price and then the world price plus tariff, you just need to plug the established prices (6.5 for world price, 6.5 + 1.5 for the tariff) into the supply and demand equations to find the quantity supplied and the quantity demanded with or without the tariff. Recently, China placed tariffs…Suppose ManTown demand and supply curves for oil is given by ? = 500−4? ? = −100+6? a) Determine which one is the supply curve and which one is the demand curve and why? b) Calculate the equilibrium price and quantity c) Suppose that ManTown demand changes to ? = 600−4?. Find the new equilibrium price and quantity. e) Compare what happens to equilibrium quantities and prices in questions (b) and (c)? f) From equation (1), if the current price is 110, describe what happens to quantities and prices of demand and supply in this market?Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world's sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. (i)Discuss the effect on the markets for each of the three products if thegovernment implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers and whiskey producers?
- Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium(i.e., supply equals demand in each case). Assume further that a good harvest impactsthe world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. (b) Discuss the effect on the markets for each of the three products if thegovernment implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers, and whiskey producers?Assume that each of the markets below is initially in equilibrium. Then for each market below, suppose that the indicated scenario occurs. Illustrate the effect of each event in a diagram and indicate the effects on the equilibrium price and quantity. d. Market: Caffeinated beverages. Scenario: Starbucks opens a franchise in St. Lucia. e. Market: Cigars Scenario: The government places a tax on cigar producers to discourage smoking coupled with the private sector running ad campaigns on the detrimental effects of smoking f. Market: Ketchup. Scenario: Insects kill half the nation’s tomato cropcan you answer these questions too: Suppose that more consumers prefer the disposable cell phone over the smart phone because the disposable cell phone is more durable than the smart phone. This latest news comes after the fact that firms that manufacture disposable cell phones have the latest technology integrated into their production facilities. What will be the market effect? Going back to question (d), suppose that the price of a disposable cell phone is now set at $11.75. How many disposable cell phones will be demanded by consumers? Whichever curve you’ve determined should be shifted, derive the new function.