Suppose that the supply of tomato soup in a city is represented by Qs = 100P – 10P - 50 where P is the price of tomato soup and Pr is price of tomato needed to produce tomato soup. All prices are in dollars 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 + 0.31 where 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 detailed graph. b) Suppose that income decreases to $10400. What is the new equation for the demand for tomato soup? Does this correspond to an increase or decrease in the demand for tomato soup? Show the effect of this event on the 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 increases to $47. What is the new equation for the supply of tomato soup? Does this correspond to an increase or decrease in supply of tomato soup? Show the effect of this event on the equilibrium and the diagram you used in part a)?

Suppose that the supply of tomato soup in a city is represented by Qs = 100P – 10P - 50 where P is the price of tomato soup and Pr is price of tomato needed to produce tomato soup. All prices are in dollars 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 + 0.31 where 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 detailed graph. b) Suppose that income decreases to $10400. What is the new equation for the demand for tomato soup? Does this correspond to an increase or decrease in the demand for tomato soup? Show the effect of this event on the 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 increases to $47. What is the new equation for the supply of tomato soup? Does this correspond to an increase or decrease in supply of tomato soup? Show the effect of this event on the equilibrium and the diagram you used in part a)?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 25P

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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…
Green et al. (2005) estmate the supply and demand curves for Californa processod tomatoes. The supply function is: \[ \ln \left(Q_{s}\right)=0.200+0.550 \ln (p) \] whereQis the quantify of processing tomatoes in milions of tons per year andpis the price in dollars per ton. The demand function is: \[ \ln \left(Q_{d}\right)=2600-0.200 \ln (p)+0.150 \ln \left(p_{1}\right) . \] wherep1is the price of tornato paste (which is what processing tomatoes are used to produce) in dollars per ton. Supposept=$119Determine how the equilerium price and quantity of processing tomatees change if the price of tomato pasise tails by16%. If the price of tomato paste fals by18%, then the equaborium price will by 5 (Enter a numene response using a real number rounded to two decimal places)
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true or false - explain in short be supported with an economic model. If the demand for and supply of a product both increases, the equilibrium quantity of the product must also increase. If the demand for a product decreases and the supply of the product increases, the equilibrium price of the product may increase or decrease, depending on whether supply or demand has shifted more. Assume that there is a fixed supply in the market. A higher price will result from a change in demand brought about by a rise in income.
Q1. Assume that the demand curve D(p) given below is the market demand for widgets:Q=D(p)=806−10p, p > 0 Let the market supply of widgets be given by:Q=S(p)=−4+8p , p > 0 where p is the price and Q is the quantity. The functions D(p) and S(p) give the number of widgets demanded and supplied at a given price. What is the equilibrium price? Please round your answer to the nearest hundredth.What is the equilibrium quantity? Please round your answer to the nearest integer.What is the total revenue at equilibrium? Please round your answer to the nearest integer.
Demand for cookies is of the following form: P=20-4QD, where QD is millions of cookies demanded per year and P is price in US dollars. Supply of cookies of the following form: P=6+Qs, where QS is millions of cookies supplied per year and P is price in US dollars. a. What is the equilibrium quantity of cookies traded? Solve the equation, showing your work. b. Graph the supply and demand curves, marking their intersection. Be sure to label intercepts, equilibrium, etc. c. The government imposes a tax of $2 per cookie on producers of cookies. What is the new equilibrium quantity of cookies traded? Solve the equation, showing your work. d. In a graph, show how the supply curve has shifted. What price do consumers now pay? After paying the tax, how much to producers receive.
Q1 Consider the market for orange juice. In this market, the supply curve is given by QS = 100PJ −20PO and the demand curve is given by QD = 1000−150PJ +100PC, where J denotes orange juice, O denotes Orange, and C denotes coffee. Assume that PO = 10 and Pc = 8. Calculate the equilibrium price and quantity in the Orange juice market. Suppose that a poor harvest season raises the price of oranges to Po = 15 Is it possible to reach a market equilibrium if the price of orange juice PJ remains unchanged? Why? How much quantity of orange juice will finally be exchanged on the market? Find the market price necessary to restore equilibrium. Deduce the equilibrium quantity of orange juice. Draw a graph to illustrate your answers. Q2 Suppose the price elasticity of demand for the market of mobile phones is 0.90. If all mobile-phone companies simultaneously increased their prices, will total revenue in the industry increase or decrease? If a single mobile-phone…
Imagine the market for Good X has a demand function of Qdx = 200 – 2Px – Py + .1M and a supply function of Qsx = 2Px – 2Pw, where Px is the price of Good X, Py is the price of Good Y, and M is the average consumer income. Pw is the price of Good W, which is an input to the production of Good X. If Py = 10, Pw = 50, M = $2700, what's the price of X in equilibrium?