4. Suppose that the demand curve is vertical while the sup- ply curve slopes upward. If a tax is imposed on sellers, who ends up paying it?

1. Suppose the demand for towels and supply of towels are given by the below: QD = 100 - 4P QS = P a. Find the equilibrium price and quantity using demand and supply functions above. b. Plot demand and supply curve on the same graph and point out the equilibrium quantity and price. You should draw each graph precisely with intercepts and slopes. c. Solve for the price elasticities of demand and supply at the equilibrium point. Which is more elastic: demand or supply? Simply explain why. d. Suppose there was a demand shock so that at each price 20 more towels are demanded since consumers want more. Plot the new demand curve on the graph that you derive in part (a). Find the new equilibrium price and quantity. (Hint: You may derive a new demand function by adding a constant to find a new equilibrium price and quantity.)

Consider the following excerpt: "Steve Cannon, CEO of the AMB Group, Blank's holding company, told ESPN that although food and beverage prices ere 50 percent lower in its new Mercedes-Benz Stadium than the prices in the Georgia Dome the previous year, fans spent 16 percent more." If there has been no change in the demand for concessions at football games, which of the following is true? Oa. Demand for concessions is always elastic b. At the initial prices, demand was inelastic. Oc. The demand curve for concessions slopes upwards Od. Concessions are an inferior good

Consider the following pairs of goods. In each case, which would you expect to have the more elastic demand? Why? e. personal computers or IBM personal computers

1. The demand for an auto company's sport utility vehicle is characterized by two types of customers. "Suburban parents" have market demand Q=200-0.67P. "Weekend warriors" have market demand Q -300-1.5P. Horizontal summation gives total demand of Q=200-0.67P+300-1.5P-500-2.17P The inverse demand curve for this is P=230-0.460. a. If the auto company cannot charge different prices to these two groups, what would be the optimal price to charge? At that price, calculate the quantity sold and total profits, if the firm produces the vehicles at constant marginal cost = 100, and fixed cost = 8,000. b. If the firm could separate out the two kinds of customers and has enough monopoly power to charge them different prices, what would be the optimal price and quantity sold in each market segment? What would be total profits? c. Discuss possible realistic ways an auto company might segment the market for such a product.

Many movie consumers who used to rent DVDs are now patronising online video rentals, especially, streaming services. a. What impact did the advent of online video rentals and streaming have on the in-store movie industry? Use the demand and supply diagram to illustrate your answer. State all your assumptions. b. Which would be more price elastic, the demand for Netflix online streaming or the demand for online movie rentals in general? c. Would the price elasticity of demand for online movie rentals and in-store movie rentals be positive or negative? what does yoyr answer imply for the equilibrium price and quantity of online movie rentals? Use the demand and supply diagram to illustrate your answer. d. Because of COVID-19, most people are staying indoors yet they cannot afford online streaming movies, like Netflix. Should the Government regulate the price of online streaming? discuss pros and cons of price regulation.

a. Demand for good Q is estimated to be Q = 14 - P, where P is price.  If the prices rises from P = $3 to P = $6, then the lost revenue due to the quantity effect is b. A firm selling a product Q faces a demand where Q = 24 - P, where P is price.  If the firm lowers the price from P = $20 to P = $16, then the lost revenue due to the price effect is

Suppose a firm sells two goods, Good A and Good B. Use the following information to answer questions that follow:Profit maximising price of Good A = R200Profit maximising price of Good B = R75MC at Q* of Good A = R120Total revenue of Good A = R26000Total revenue of Good B = R24000Rothschild index of Good B = 0.4Price elasticity of the market demand for Good B = -2 2.1. Calculate each of the following:Ed of Good A = ____________Ed of Good B =__________MC at Q* of Good B = R___________ 2.2 Suppose that the firm noticed that when it increased the price of Good A from R200 to R300, the sales of Good B decreased from 1000 to 600 units. Calculate and classify the cross-price elasticity of demand between Good A and Good B.Ec =____________Good A and Good B are classified as (substitutes/compliments)  2.3. Use the elasticity coefficient calculated above and the information provided, to calculate by how much the firm’s total combined revenue will change if it decreases the price of Good A by…

1. The Reinheitsgebot is a set of laws established in the 1500s that regulate the production and sale of beer in Germany. Among its provisions, the edict set maximum prices that brewers could charge at various times of the year: During Oktoberfest, the price for one [Bavarian Liter] is not to exceed one Pfennig (Penny, Munich value). Suppose that the demand for beer is given by $QD = 6000-1600P, and the supply of beer is given by QS = -1000+2000P. a) If a 1-Pfennig price ceiling is imposed, does the price ceiling make society better off? Does it make beer producers better off? Does it make beer drinkers better off?

1. The Reinheitsgebot is a set of laws established in the 1500s that regulate the production and sale of beer in Germany. Among its provisions, the edict set maximum prices that brewers could charge at various times of the year: During Oktoberfest, the price for one [Bavarian Liter] is not to exceed one Pfennig (Penny, Munich value). Suppose that the demand for beer is given by $QD = 6000-1600P, and the supply of beer is given by QS = -1000+2000P. a) How will a l-Pfennig price ceiling affect the price paid by consumers for beer, and how will it affect the quantity consumed?