Q. 6 The following graph shows the demand and supply for the grape market. 5 4.5 4 3.5 3 2.5 2 1.5 12 16 20 24 28 32 36 Quantity per period 40 S 44 D 48 Suppose the price of oranges (a substitute) were to decrease, causing the demand for grapefruit to change by 12 kilos. Draw the new demand line and calculate the new market equilibrium price and quantity.

Q. 6 The following graph shows the demand and supply for the grape market. 5 4.5 4 3.5 3 2.5 2 1.5 12 16 20 24 28 32 36 Quantity per period 40 S 44 D 48 Suppose the price of oranges (a substitute) were to decrease, causing the demand for grapefruit to change by 12 kilos. Draw the new demand line and calculate the new market equilibrium price and quantity.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 17P: If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded...

See similar textbooks

Similar questions

What does a downward-sloping demand curve mean about how buyers in a market will react to a higher price?
What is the difference between the demand and the quantity demanded of a product, say milk? Explain in words and show the difference on a graph with a demand curve for milk.
In an analysis of the market for paint, an economist discovers the facts listed below. State whether each of these changes will affect supply or demand, and in what direction. There have recently been some important cost-saving inventions in the technology for making paint. Paint is lasting longer so that property owners need not repaint as often. Because of severe hailstorms, many people need to repaint now. The hailstorms damaged several factories that make paint, forcing them to close down for several months.
Table 3.9 illustrates the markets demand and supply for cheddar cheese. Graph the data and find the equilibrium. Next, create a table showing the change in quantity demanded or quantity supplied, and a graph of the new equilibrium, in each of the following situations: The price of milk, a key input for cheese production, rises, so that the supply decreases by 80 pounds at every price. A new study says that eating cheese is good for your health, so that demand increases by 20 at every price.
If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?
What is the difference between the supply and the quantity supplied of a product, say milk? Explain in words and show the difference on a graph with the supply curve for milk.
How can you locate the equilibrium point on a demand and supply graph?
Many changes are affecting the market for oil. Predict how each of the following events will affect the equilibrium price and quantity in the market for oil. In each case, state how the event will affect the supply and demand diagram. Create a sketch of the diagram if necessary. Cars are becoming more fuel efficient, and therefore get more miles to the gallon. The winter is exceptionally cold. A major discovery of new oil is made off the coast of Norway. The economies of some major oil-using nations, like Japan, slow down. A war in the Middle East disrupts oil-pumping schedules. Landlords install additional insulation in buildings. The price of solar energy falls dramatically. Chemical companies invent a new, popular kind of plastic made from oil.
Explain why the following statement is false: In the goods market, no seller would be willing to sell for less than the equilibrium price.
The following table summarizes information about the market for principles of economics textbooks: What is the market equilibrium price and quantity of textbooks? To quell outrage over tuition increases, the college places a $55 limit on the price of textbooks. How many textbooks will be sold now? While the price limit is still in effect, automated publishing increases the efficiency of textbook production. Show graphically the likely effect of this innovation on the market price and quantity.
How does one analyze a market where both demand and supply shift?
As a general rule, is it safe to assume that a change in the price of a good will always have its most significant impact on the quantity demanded of that good, rather than on the quantity demanded of miller goods? Explain.