You are given a task for analysis the market for Sport Bike. You found that when the market price of bike is $500 the market demand is 9,200 bikes, whereas the market supply is 6,000 bikes. Yet, when the price rises to $650 the market demand is 6,800 bikes but the market supply is 8,000 bikes. Your tasks are: a) Define the equations of market demand and market supply for bike. b) Find the equilibrium-price and equilibrium- quantity and draw a graph to show this market. c) Estimate the consumers’ surplus, producers' surplus and bike market's surplus.

You are given a task for analysis the market for Sport Bike. You found that when the market price of bike is $500 the market demand is 9,200 bikes, whereas the market supply is 6,000 bikes. Yet, when the price rises to $650 the market demand is 6,800 bikes but the market supply is 8,000 bikes. Your tasks are: a) Define the equations of market demand and market supply for bike. b) Find the equilibrium-price and equilibrium- quantity and draw a graph to show this market. c) Estimate the consumers’ surplus, producers' surplus and bike market's surplus.

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

Chapter8: Understanding Markets And Industry Changes

Section: Chapter Questions

Problem 4MC

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