THIS IS FOR MATHEMATICAL ECONOMIC CLASS Question (2):The market for disposable cell phones: Q = 2300 – 16p and Q = 1850 + 14p.Find the equilibrium price and quantity.Suppose that a new technology has emerged that will enable firms to mass produce the cell phones at a reduced cost. Which curve will be affected and what will be the general outcome?Going back to question (b), if the new equilibrium price of a disposable cell phone is $11.25, how many disposable cell phones will be demanded by consumers? Derive the new function based on your analysis.

The supply shows the relationship between Price and the quantity supplied which is a direct and…

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Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.3P

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THIS IS FOR MATHEMATICAL ECONOMIC CLASS

Question (2):

The market for disposable cell phones: Q = 2300 – 16p and Q = 1850 + 14p.

Find the equilibrium price and quantity.
Suppose that a new technology has emerged that will enable firms to mass produce the cell phones at a reduced cost. Which curve will be affected and what will be the general outcome?
Going back to question (b), if the new equilibrium price of a disposable cell phone is $11.25, how many disposable cell phones will be demanded by consumers? Derive the new function based on your analysis.

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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Suppose that more consumers prefer the disposable cell phone over the smart phone because the disposable cell phone is more durable than the smart phone. This latest news comes after the fact that firms that manufacture disposable cell phones have the latest technology integrated into their production facilities. What will be the market effect?
Going back to question (d), suppose that the price of a disposable cell phone is now set at $11.75. How many disposable cell phones will be demanded by consumers? Whichever curve you’ve determined should be shifted, derive the new function.

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