2. Assume equations 1 and 2 below were estimated from the data gathered that will represent the demand and supply functions respectively of an individual buyer and seller respectively for product X. Eq. 1 Eq. 2 Qdy = 65,000 – 11.25Px + 15P, – 3.751 + 7.54 Qsx = 7,500 + 14.25Px – 15P, – 3.75C where Px - price of product X; Py- price of product Y; I - average consumer's income; A advertising expenditure; Pz - price of product Z; and C cost of production.
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- Given: Market for Flowers Price of Flower/boquet 100 Qd (x) of Flower/boquet 40 Fertilizer (f) for Flower/bag 70 Point Price of Candle Consumer (z) /piece 40 Income (I) (Time) A 10,000 15,000 20,000 330 32 60 90 C 500 20 70 110 1. Own price elasticity of demand (Pn) C A, 2. Income elasticity (ny) A-C; (inferior or normal good?) 3. Cross-price elasticity (nxz) B-C; (substitute or complementary?) 4. Input-price elasticity (nf) ABSupply and Demand The table below gives thequantity of graphing calculators demanded and thequantity supplied for selected prices.a. Find the linear equation that gives the price as afunction of the quantity demanded.b. Find the linear equation that gives the price as afunction of the quantity supplied.c. Use these equations to find the market equilibriumprice.Inferior goods are those for which demand increases asA) income decreases. B) income increases. C) the price of a substitute rises. D) the price of a substitute falls.
- Make sure that no plagiarism otherwise I will give you downvote Explain what is meant by cross-price effects. and explain how the cross-price effects can explain the consumer's optimal choice.Suppose that the demand and supply schedules for raisins in South Carolina are as fallows, quantitiesare measured in millions of packs per month. What is the quantity of raisins bought if the price is 50cents ? Price (cents per pack) Quantity demanded20 18030 16040 14050 12060 10070 8080 60 a) 120b) 180c) 100Exercise 1. The demand for your product X has been estimated to be QX = 7, 880 − 4PX − 2PY + PZ − 0.1M where Y and Z are other (related) products. The relevant price and income data are asfollows: PX = 10, PY = 15, PZ = 50, M = 40, 000 b. Is X an inferior or a normal good? d. Graph the demand curve for X given the above information.e. How will the demand curve change if M falls to 35, 000? Is that in line with b.?
- If the cross-price elasticity of demand for goods X and Y is zero, it would imply that a. price elasticity of demand for X is zero. b. price elasticity of demand for Y is zero. c. X and Y are unrelated. d. X and Y are substitutes. e. X and Y are complements.Explain and ilustrate grpaphically the effect of: 1. An increase in income upon the demand curve of an inferior good. 2. A drop in the price of product S upon the demand for substitute product T. 3. A decline in income upon the demand curve of a normal good. 4. An increase in the price of product J upon the demand for complementary good K.Explain the type of price and income elasticity for a normal good, inferior good and luxury good.
- computers and software are complements, then A) other things being equal, a fall in the price of computers will increase the demand for software and, the price of software will fall. B) other things being equal, a rise in the price of computers will decrease the demand for software and, the price of software will fall. C) other things being equal, a fall in the price of computers will decrease the demand for software and, the price of software will fall. D) other things being equal, a rise in the price of software will increase the demand for computers and, the price of computers will rise. E) other things being equal, a fall in the price of software will decrease the demand for computers and, the price of computers will fall.A change in which of the following alters buying plans for cars but does NOT shift the demandcurve for cars?A) a 10 percent decrease in the price of car insuranceB) a 20 percent increase in the price of a carC) a 5 percent increase in people's incomeD) an increased preference for walking rather than drivingDRAW THE MARKET EQUILIBRIUN CURVE. NOW SHOW NEW TECHNOLOGY AND INCOME GOES UP FOR BUYERS OF INFERIOR PRODUCTS