EBK MICROECONOMICS
5th Edition
ISBN: 9781118883228
Author: David
Publisher: YUZU
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Chapter 1, Problem 1.8P
To determine
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There are about 2500 leather wallets available in a country. When the price of these wallets is raised to $3000, economists believe that people may not be willing to buy them. On the other hand, if the price is decreased to $0, the 2500 leather wallets will be sold out. However, no producers will be willing to sell them at $0. If the price is set to $1000, producers will be willing to sell all 2500 leather wallets.
Create the demand and supply equation for the leather wallets based on the given information.
An economist estimates that a market has a demand curve of the form P = 26 - (0.867) Q and a supply curve of the form P = 0.5 + (1.21) Q. (See the curves graphed in the figure below.) Accordingly, she estimates that the equilibrium price ( P e) in the market will be $15.36 (or $15.355561). This means that the amount of the product bought and sold in the market must be ____.
At a price of $4.61 per pound, the supply for cherries is 16,107 pounds, and the demand is 10,362 pounds. When the price drops to $4.18 per pound, the supply decreases to 10,789 pounds and the demand increases to 12,724 pounds. Assume that the price-supply and price-demand equations are linear.
What is the equilibrium price?
Chapter 1 Solutions
EBK MICROECONOMICS
Ch. 1 - Prob. 1RECh. 1 - Prob. 2RECh. 1 - Prob. 3RECh. 1 - Prob. 4RECh. 1 - Prob. 5RECh. 1 - Prob. 6RECh. 1 - Prob. 7RECh. 1 - Prob. 1.1PCh. 1 - Prob. 1.2PCh. 1 - Prob. 1.3P
Ch. 1 - Prob. 1.4PCh. 1 - Prob. 1.5PCh. 1 - Prob. 1.6PCh. 1 - Prob. 1.7PCh. 1 - Prob. 1.8PCh. 1 - Prob. 1.9PCh. 1 - Prob. 1.10PCh. 1 - Prob. 1.11PCh. 1 - Prob. 1.12PCh. 1 - Prob. 1.13PCh. 1 - Prob. 1.14PCh. 1 - Prob. 1.15PCh. 1 - Prob. 1.16PCh. 1 - Prob. 1.17PCh. 1 - Prob. 1.18PCh. 1 - Prob. 1.19PCh. 1 - Prob. 1.20PCh. 1 - Prob. 1.21P
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- Demand for cookies is of the following form: P=20-4QD, where QD is millions of cookies demanded per year and P is price in US dollars. Supply of cookies of the following form: P=6+Qs, where QS is millions of cookies supplied per year and P is price in US dollars. a. What is the equilibrium quantity of cookies traded? Solve the equation, showing your work. b. Graph the supply and demand curves, marking their intersection. Be sure to label intercepts, equilibrium, etc. c. The government imposes a tax of $2 per cookie on producers of cookies. What is the new equilibrium quantity of cookies traded? Solve the equation, showing your work. d. In a graph, show how the supply curve has shifted. What price do consumers now pay? After paying the tax, how much to producers receive.arrow_forwardSuppose the current price of a good is $125. At this price, the quantity supplied is 150 units, and the quantity demanded is 110 units. For every $1 decrease in price, the quantity supplied decreases by 5 units and the quantity demanded increases by 3 units. At the current price, the quantity demanded is _____ than the quantity supplied. This means that the market is currently experiencing a ______ . In order to adjust, the market price will ______ until the quantity demanded and quantity supplied are equal. The result is an equilibrium quantity of ________ and an equilibrium price of _______ .arrow_forwardat a price of $4.91 per pound, the supply for cherries is 16,124 pounds, and the demand is 10,393 pounds. When the price drops to $4.16 per pound, the supply decreases to 10,711 pounds and the demand increases to 12,906 pounds. Assume that the price-supply and price-demand equations are linear. What is the equilibrium price? $ per pound. Round to the nearest cent.arrow_forward
- If we observe a rise in the equilibrium price and a decline in the equilibrium quantity, then which of the following must have happened? A. Both demand and the supply must have increased. B. Both demand and the supply must have decreased. C. The demand increased while the supply remained unchanged. D. The supply increased while the demand remained the same. E. None of the above is correct.arrow_forwardAt a price of $4.96 per pound, the supply for cherries is 16,253 pounds, and the demand is 10,364 pounds. When the price drops to $4.16 per pound, the supply decreases to 10,501 pounds and the demand increases to 12,547 pounds. Assume that the price-supply and price-demand equations are linear. What is the equilibrium quantity? Round to the nearest pound.arrow_forwardSketch the market described above and indicate the values of the equilibrium price andequilibrium quantity.arrow_forward
- The demand for watches is given by p= 7000 - 2q dollars and the supply of watches is given by p = 0.01q2 + 2q + 1000 dollars where q is the number of watches demanded and supplied when the price per watch is p dollars. Based on the information provided calculate the equilibrium quantity and the equilibrium price for watches.arrow_forwardSuppose the supply and demand equation are given as follow: Demand: Qd=112-3*p Supply: Qs=22+1*p What's the equilibrium quantity?arrow_forward
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