2 Uber rides and taxicab rides are substitutes to the typical consumer in Manhattan. A decrease in the supply of taxicab ridesincreases consumer surplus in the market for taxicab rides and increases producer surplus in the market Uber rides.decreases consumer surplus in the market for taxicab rides and decreases producer surplus in the market for Uber rides.decreases consumer surplus in the market for taxicab rides and increases producer surplus in the market for Uber rides.increases consumer surplus in the market for taxicab rides and decreases producer surplus in the market for Uber rides.

Consumer surplus denotes the benefits that the consumer derives through market participation. It is…

Answered: increases consumer surplus in the…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 8MC

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Which of the following would not cause market demand for a normal good to decline? a. An increase in the price of a substitute b. An increase in the price of a complement c. A decline in consumer income d. Consumer expectations that the good will go on sale in the near future e. An announcement by the Surgeon General that the product contributes to premature death
The demand schedule below pertains to sandwiches demanded per week. Harry's Price Quantity Demanded Darby's Quantity Demanded Jake's Quantity Demanded $3 3 $5 1 Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the following: •x= 2. • The current price of a sandwich is $3.00. • The market quantity supplied of sandwiches is 4. • The slope of the supply curve is 2. Then there is currently a surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00. surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.
Consider two markets: the market for coffee and the market for hot cocoa. The initial equilibrium for both markets is the same, the equilibrium price is $6.50$⁢6.50, and the equilibrium quantity is 39.039.0. When the price is $9.75$9.75, the quantity supplied of coffee is 71.071.0 and the quantity supplied of hot cocoa is 105.0105.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for hot cocoa. Please round to two decimal places. Supply in the market for coffee is more elastic than supply in the market for hot cocoa. There is not enough information to tell which has a higher elasticity. the same elasticity as supply in the market for hot cocoa. less elastic than supply in the market for hot cocoa.
According to the graph below, with a price ceiling present in this market, if the supply curve for gasoline shifts from Sl to S2. P P2 P3 00000 P1 $2 S1 Ceiling Q2 Q1 The price will increase to P2. A surplus will occur at the new market price of P2. The market price will stay at P1 due to the pricing ceiling. A shortage will occur at the price ceiling of P3. Nothing happens to the equilibrium.
SCENARIO: Rented DVDs and movies shown in theaters are substitutes. Rented DVDs and plasma TVs are complements. Plasma TVs and movies shown in theaters are normal goods. People watch rented DVDs more often in the winter than in the summer a) Most plasma TVs sold in the United States are imported from Japan. If the United States government reduces the number of plasma TVs that can be imported into the United States, ceteris paribus, what would happen? b) To raise additional revenues, the government imposes an entertainment tax on movie tickets, but there are no new additional taxes levied on rented DVDs. This would lead to c) You observe that the rental price for DVDs is higher in the winter than in the summer. This would be explained by the fact that d) The number of stores renting DVDs is reduced by 25%, reducing the number of DVDs available. What would happen?
If the price of a substitute to good X increases, then A) the demand for good X will increase. B) the market price of good X will decrease. C) the demand for good X will decrease. D) the demand for good X will not change
If the current price of a good is $10, market demand is Qd = 400 - 20P, and market supply is Qs = -50 + 10P, then more of the good is being produced than people want to buy. a lower price will increase the shortage. at the current price there is excess demand, or a shortage, of 150 units. a lower price will increase the shortage and at the current price there is excess demand, or a shortage, of 150 units. All of the above
When a market has a surplus, the quantity demanded is greater than quantity supplied. Select one: True False
Assuming an increase in Demant and decrease in Supply, which of the following statements is TRUE? The price of the good will decrease. The quantity of the good will definitely decrease. The price of this good will definitely increase. There will be a permanent shortage of this good. The new equilibrium quantity may increase, decrease, or stay the same. A surplus of this good will result from these changes in Supply and Demand. What new equiLibrium quantity will result depends on the relative magnitude of the changes and the shapes of the Demand and Supply curves. We cannot determine what will happen to price.

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