Question IIIby the function Qd = 252 – 4P, and the supply is perfectly inelastic such thatQs = 172, as farmers cannot change the quantity supplied of cheese in theshort-run. Calculate the following:Assume that the market demand for cheese is given1. The consumer surplus in the market for cheese.2. The own-price elasticity of demand for cheese at the price of $40 per unit.3. The reservation price of consumers, at the point where the elasticity of demand is equal to0.189.

Given, the market demand for cheese: Qd = 252-4P Supply is perfectly inelastic: Qs= 172 Equilibrium…

Answered: Question III by the function Qd = 252 –…

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

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 6E

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Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price 2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up 2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?
Consumers' Surplus The demand function for a certain brand of CD is given by p = −0.01x2 − 0.3x + 19 where p is the wholesale unit price in dollars and x is the quantity demanded each week, measured in units of a thousand. Determine the consumers' surplus (in dollars) if the market price is set at $9/disc. (Round your answer to two decimal places.) $
The demand function for a certain product is? = 86 − ?2and the supply function is? = ?2 + 6? + 30where p is in millions of dollars and x is the number of thousands of units. Find the equilibriumpoint (x, p), then find the consumer’s surplus and producer’s surplus. Round your answer to thenearest unit (the nearest million dollars).
The demand curve for product X is given by QXd = 420 − 4PX.a. Find the inverse demand curve. Instruction: Enter all values as integers, or if needed, as a decimal. PX = − QXdInstructions: Enter your responses to the nearest penny (two decimal places).b. How much consumer surplus do consumers receive when Px = $50?$ c. How much consumer surplus do consumers receive when Px = $25?$ d. In general, what happens to the level of consumer surplus as the price of a good falls?The level of consumer surplus as the price of a good falls.
suppose there is a market demand for coffee that express with the function Qd=252-4p and at the same time the supply of coffee is perfectly inelastic Qs=172, therefore farmers cannot change the supply quanitiy in the shortrun. so make a graph and calculate 1)consumer surplus, 2)the own-price elasticity of demand at $40/unit, and 3)the reservation price of consumers where demand elasticity equal 0.189.
Given, price functions for quantity supplied, Qs and quantity demanded Qd: P = 40 - 2Qd p = 10 + 3Qs If the price increases by 20%, find the following: I) New Consumer Surplus II) New Producer Surplus III) New Total Surplus
The supply curve for product X is given by QXS = −500 + 10PX .a. Find the inverse supply curve.P = ____+ ____Qb. How much surplus do producers receive when Qx = 470? When Qx = 1,190?When QX = 470: $ When QX = 1,190: $
Suppose the market demand curve for a product is given by Qd = 500 −50P and the market supply curve is given by Qs = −50 + 25P. a)At the market equilibrium, what is the price elasticity of demand? Hint: Find and use in place of ( and use equilibrium values of P and Q. Comment on the value of the price elasticity of demand. Suppose the price in this market is $5. What is the amount of excess demand? Suppose demand for good A is given by QDA= 500- 5PA+ 2PB+ 0.80I where PA is the price of good A,PB is the price of some other good B, and I is income. Assume that PA is currently Tk.10 PB is currently Tk.5, and I is currentlyTk.200. a) What is the income elasticity of demand for good A at the current situation? Hint: Find ∂Q/∂I and use in place of (∆Q/∆I). Comment on the value of the income elasticity.
The equilibirum quantity and price is 5 units and $49 dollars respectivily. Demand function is p = 74 – Q2 and Supply function is P = (Q+2)2 . Calculate consumer surplus?

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