2. Suppose General Electric, one of the largest suppliers of light bulbs, decides to discontinue its production of light bulbs. SELECTED THE CORRECT ANSWER  a. Which of the following will occur in the market for light bulbs? -demand will increase -supply will decrease -demand will decrease -supply will increase   b. Will General Electric's exit from the light bulb market result in a shortage or surplus of light bulbs at the previous price? Will the price of light bulbs _rise or fall? _shortage, fall _surplus, rise _shortage, rise _surplus, fall

pchs.palihigh.org bookmarks Bb Microsoft Word - A... Use the supply and demand schedule below to plot the supply and demand curves for tequila in this market. Tequila Price Quantity Demanded Quantity Supplied 10 100 15 70 10 20 42 22 25 12 35 48 30 What is the equilibrium quantity? O a 20 bottles Ob 10 bottles C 40 bottles 30 bottles M国 ( Sign out

3. Consider a market for custom plastic cups. The demand function is D(p) = 100 - 2p and supply is S(p) = 4p - 20. a. Calculate the elasticity of demand at any price. b. What is the equilibrium price? C. What is the elasticity of demand in equilibrium? d. Are revenues maximized at the equilibrium price? How do you know? If not, what should firms do to increase revenues?

3. The effects of price changes on total revenue Edison's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Edison produced four fire engines, but he has decided to increase production to five fire engines. The following graph shows the demand curve Edison faces. As you can see, to sell the additional engine, Edison must lower his price from $105,000 to $90,000 per fire engine. Note that while Edison gains revenue from the additional engine he sells, he also loses revenue from the initial four engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000. (Note: Area is shown in thousands.) ICE (Thousands of dollars per fire engine). 150 135…