3. The variety of demand curves The following graph displays four demand curves (LL, MM, NN, and OO) that intersect at point A. PRICE (Dollars per unit) 200 180 160 140 120 100 80 60 40 20 0 A+ 0 L Statement 20 M N сх хо + B O E A N + 40 60 80 100 120 140 160 180 200 QUANTITY (Units) Using the graph, complete the table that follows by indicating whether each statement is true or false. Between points A and D, curve NN is inelastic. M Between points A and B, curve LL is unit elastic. Curve NN is less elastic between points A and D than curve MM is between points A and C. True O False O O O

Priçe 4 A D2 2 B 1 D1 1 2 3 4 5 6 7 7 Quantity In this graph, a move from point A to point B represents which of the following? O a decrease in demand O a decrease in quantity demanded an increase in demand O an increase in quantity demanded

Refer to the graph, which shows the market for a product. Which of the following could not explain the indicated increase in equilibrium price from P1 to P22 Supply Price P2 P₁ 0 Q₁ Q₂ Quantity D₁ D2 O a. An increase in consumer incomes O b. An increase in the price of a substitute product O c. An increase in production costs O d. A decrease in the price of a complementary product

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16) The market for two-bedroom apartments in a city has the onowing supply and acmand schedules: Price 200 400 600 800 1000 1200 1400 1600 1800 QD (thousands) 360 315 270 225 180 135 90 45 0 Qs (thousands) 0 45 90 135 180 225 270 315 360 2000 1800 1600 1400 1200 1000 800 600 400 200 0 O 30 60 90 120 150 180 210 240 270 300 330 360 Ca a. Graph demand and supply. b. What is the equilibrium price and quantity? PE = 460 270000 QE = Calculate Consumer Surplus, Producer Surplus, and Total Surplus. Illustrate CS & PS on the grid above. 036

6. The variety of demand curves The following graph displays four demand curves (PP, QQ, RR, and SS) that intersect at point V. PRICE (Dollars per unit) 20 18 16 14 12 10 po 4 2 19 0 # + 0 P 2 D +XX W R + + 4 6 > S + S N 8 10 12 QUANTITY (Units) R P + + → 14 16 18 20 (? Using the graph, complete the table that follows by indicating whether each statement is true or false. Statement Between points V and Y, curve RR is inelastic. Between points V and W, curve PP is unit elastic. Curve QQ is more elastic between points V and X than curve RR is between points V and Y. True False

2. Suppose that annual demand in the U.S. market for ice cream cones can be expressed as QD = 800 + .2I - 100P, where QD is the number of cones demanded in millions of cones, I equals average monthly income in dollars, and P is price in dollars per cone.  Supply can be expressed as QS = 200 + 150P (with the same units for quantity and price).   A.    Graph the demand and supply curves for ice cream cones, assuming that average monthly income is $2,000, and solve for the equilibrium price and quantity.   B.     Now assume that the average monthly income drops to $750 and supply is unchanged. Draw the new demand curve on the same graph as used in (a) above and solve for the new equilibrium price and quantity.            How would you describe the shift in demand intuitively?