Microeconomics (7th Edition)
Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 1.A, Problem 3PA
To determine

Calculation of percentage changes in sales.

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Consider that the quantity of Milk A sold will increase by 50%, the sales revenue of Milk A will decrease by 25%, and the price is determined by sales revenue divided by quantity sold. Which of the following best describes the expected change in Milk A's price in April, compared to March? January February March Milk A Quantity Sold Sales Revenue Quantity Sold 500 800 400 $3,000 $4,400 $2,400 Milk B 1200 1500 950 Select the single best answer: A. increase by 25% B. decrease by 50% C. decrease by 25% D. decrease by 15% E. no change Sales Revenue $5,000 $6,000 $4,400 Quantity Sold Milk C 600 550 700 Sales Revenue $3,400 $3,300 $5,000
I am stuck on this problem, I don't know where to start.  Could you give a step by step on how to figure this problem out. Thank you. There is an increase in demand of 100 units at each price and a decrease in supply of 100 units at each price.  In the graph below, draw the new demand and supply lines. Instructions:  Use the graphing tools, 'D2', 'S2', to plot the new demand and supply lines on the figure and then use the grid lines to determine the new equilibrium price and quantity.
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