The effects of tax in price, profit, and gross expenditure.

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Spreadsheet exercises. Suppose that the market for video games is competitive with demand function Qd = 130 − 4p + 2Y + 3pm − 2pc, where Qd is the quantity demanded, p is the market price, Y is the monthly budget that anaverage consumer has available for entertainment, pm is the average price of a movie, and pc is the price of a controller that is required to play these games. 1. Given that Y = $100, pm = $30, and pc = $30, use Excel to calculate quantity demanded for p = $10 to p = $80 in $5 increments. Use Excel’s charting tool to draw the demand curve. 2. Now, Y increases to $120. Recalculate the demand schedule in part 1. Use Excel’s charting tool to draw the new demand curve in the same diagram. 3. Let Y = $100 and pc = $30 again, but let pm increase to $40. Recalculate the demand schedule in part 1. Use Excel’s charting tool to draw the graph of the new demandcurve. 4. Let Y = $100, pm = $30, and pc increase to $40. Recalculate the demand schedule in part 1 and use Excel to draw…

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Chapter 9, Problem 4CQ

To determine

The effects of tax in price, profit, and gross expenditure.

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Spreadsheet exercises. Suppose that the market for video games is competitive with demand function Qd = 130 − 4p + 2Y + 3pm − 2pc, where Qd is the quantity demanded, p is the market price, Y is the monthly budget that anaverage consumer has available for entertainment, pm is the average price of a movie, and pc is the price of a controller that is required to play these games. 1. Given that Y = $100, pm = $30, and pc = $30, use Excel to calculate quantity demanded for p = $10 to p = $80 in $5 increments. Use Excel’s charting tool to draw the demand curve. 2. Now, Y increases to $120. Recalculate the demand schedule in part 1. Use Excel’s charting tool to draw the new demand curve in the same diagram. 3. Let Y = $100 and pc = $30 again, but let pm increase to $40. Recalculate the demand schedule in part 1. Use Excel’s charting tool to draw the graph of the new demandcurve. 4. Let Y = $100, pm = $30, and pc increase to $40. Recalculate the demand schedule in part 1 and use Excel to draw…

c) At the market price in part a, the net gain to consumers when 10,000 units are purchased is $__________.

The following questions highlight how changes in numbers can be measured in both absolute and relative, or percentage, terms. Two stores in a mall are having promotions. The first, Annie's Attic, is offering $20.00 off any purchase. The other, Betty's Breakables, is offering 35% off any purchase. Each store offers a music box at a (non-discounted) price of $80 and a faux Ming vase for $60.00, as summarized in the following table. Determine the promotional price of each item at each store. Item Original Price Discount (Dollars) $20.00 Off 35% Off (Dollars) (Dollars) A music box $80 $ $ A faux Ming vase $60.00 $ $ Suppose a friend of yours wants to buy a crystal candlestick. You remember seeing this item.