ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Q3:
Answer the following questions with the help of the table that shows the demand and supply for potato chips:
a. What are the
b. If chips were 60 cents a bag, describe the situation in the market for potato chips and explain what would happen to the price of a bag of chips.
- suppose a new snack food comes onto the market and as a result the demand for potato chips decreases by 40 million bags per week.
c. Has there been a shift in or a movement along the supply curve of chips?
d. Has there been a shift in or a movement along the demand curve for chips?
e. What is the new equilibrium price and quantity of chips?
- suppose that a flood destroys several potato farms and as a result supply decreases by 20 million bags a week at the same time as the new snack food comes onto the market.
f. What is the new equilibrium price and quantity of chips?
|
Price (cents per bag) |
Quantity demanded (millions of bags a week) |
Quantity supplied (millions of bags a week) |
|
40 |
170 |
90 |
|
50 |
160 |
100 |
|
60 |
150 |
110 |
|
70 |
140 |
120 |
|
80 |
130 |
130 |
|
90 |
120 |
140 |
|
100 |
110 |
150 |
|
110 |
100 |
160 |
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- For each of the following articles below, analyze the impact of a change in demand or a change in supply or both (or it may not necessarily illustrate a change) on price equilibrium price, market price) for the good under consideration and draw the appropriate graph for each article. Use D., S.. P., and O. to symbolize initial demand, supply, equilibrium price and quantity respectively. Use D,, S., P., and Q, to represent the new demand, supply, equilibrium price and quantity respectively Slaughter rates dropped in 2019 because of low farm gate prices and weak pork demand, which contributed to a decline in 2019 swine meat production (plg333.com. March 26, 2020)arrow_forwardSuppose the price of apples (a complement to peanut butter) rises. At the same time, suppose the price of peanuts (which are used to make peanut butter) falls. Given these changes, you should expect to see: a decrease in the equilibrium price of peanut butter, but it's hard to say what will happen to the equilibrium quantity. an increase in both the equilibrium price and quantity of peanut butter. an increase in the equilibrium quantity of peanut butter, but it's hard to say what will happen to the equilibrium price. an increase in the equilibrium price of peanut butter, but it's hard to say what will happen to the equilibrium quantity.arrow_forward14. A supply and demand puzzle The following graph presents the market for motorcycles in 2018. Between 2018 and 2019, the equilibrium price of motorcycles remained constant, but the equilibrium quantity of motorcycles increased. Given this information, you can conclude that between 2018 and 2019, the supply of and the demand for motorcycles motorcycles Make changes to the graph to illustrate your answer by showing the positions of the supply and demand curves in 2019. Note: Select and drag one or both of the curves to the desired position, Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther." PRICE (Dollars per motorcycle) Supply Demand Demand D -0 Supplyarrow_forward
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