Macroeconomics: Principles, Problems, & Policies
20th Edition
ISBN: 9780077660772
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 3.A, Problem 5ARQ
To determine
Demand and supply.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Suppose both the demand for olives and the supply of olives decline by equal amounts over some time period. Use graphical analysis to show
the effect on equilibrium price and quantity.
Instructions: On the graph below, use your mouse to click and drag the supply and demand curves as necessary.
D1
Quantity of olives
Price of olives
According to economic theory, the demand x for a quantity in a free market decreases as the
price p increases (see the figure). Suppose that the number x of DVD players people are willing
dx
(A) Find
9,000
to buy per week from a retail chain at a price of $p is given by x =
10 sp<70.
0.3p + 1'
dx
Answer parts (A), (B), and (C).
dp
4500-
(B) Find the demand and the instantaneous rate of change of demand with respect to price
when the price is $30. Write a brief interpretation of these results.
The demand is x =
when the price is $30.
2250-
9,000
The instantaneous rate of change of demand with respect to price is
when the price is
X =
0.3p + 1
$30.
Write a brief interpretation of these results.
p.
0-
40
80
At a price level of $30, the demand is
DVD players per week and demand is
Price (dollars)
V at the rate of
(C) Use the results from part (B) to estimate the demand if the price is increased to $31.
Demand
.....
Because you understand the law of demand, you can deduce that the correct graphical
representation of the demand for CDs must be
Chapter 3 Solutions
Macroeconomics: Principles, Problems, & Policies
Ch. 3.A - Prob. 1ADQCh. 3.A - Prob. 2ADQCh. 3.A - Prob. 3ADQCh. 3.A - Prob. 4ADQCh. 3.A - Prob. 5ADQCh. 3.A - Prob. 6ADQCh. 3.A - Prob. 7ADQCh. 3.A - Prob. 1ARQCh. 3.A - Prob. 2ARQCh. 3.A - Prob. 3ARQ
Ch. 3.A - Prob. 4ARQCh. 3.A - Prob. 5ARQCh. 3.A - Prob. 6ARQCh. 3.A - Prob. 1APCh. 3.A - Prob. 2APCh. 3.A - Prob. 3APCh. 3.6 - Prob. 1QQCh. 3.6 - Prob. 2QQCh. 3.6 - Prob. 3QQCh. 3.6 - Prob. 4QQCh. 3 - Prob. 1DQCh. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Prob. 7P
Knowledge Booster
Similar questions
- The following table shows the weekly demand and supply in the market for ice cream in New York City. Price Quantity Demanded Quantity Supplied (Dollars per gallon of ice cream) (Gallons of ice cream) (Gallons of ice cream) 4 2,000 200 8 1,600 600 12 1,200 800 16 800 1,200 20 400 1,800 Based on the preceding table, plot the demand for ice cream on the following graph using the blue points (circle symbol). Next, plot the supply of ice cream using the orange points (square symbol). Finally, use the black point (cross symbol) to indicate the equilibrium price and quantity in the market for ice cream. DemandSupplyEquilibrium0400800120016002000240024201612840PRICE (Dollars per gallon of ice cream)QUANTITY (Gallons of ice creamarrow_forwardBecause you understand the law of supply, you can deduce that the correct graphical representation of the supply for CDs must be S1 or S2?arrow_forwardExplain in a critical way the effects of supply and demand on seasonal agricultural products (strawberry for example). Use graphs to show your analysisarrow_forward
- The price of crude oil has been increasing. The price of a good rises in two cases, when demand rises or when supply falls, or both. It has been given that there has been a growing demand for crude oil for turning into refined petroleum (increase in demand), along with a decline in its production (fall in supply). It implies that both an increase in demand and a decrease in supply is responsible for the price rise. Draw a graph to show the information.arrow_forwardSuppose that demand and supply of apples are described by the following equations: P = 100 - 3Q (demand) P = 20 + Q (supply) a) Calculate the equilibrium quantity.arrow_forwardThe figure depicts the market for gasoline. Suppose that consumers expect the price of gasoline to decrease in the future. What effect will this event have supply and demand in the gasoline market? Demonstrate your answer graphically Instructions: Use the tool provided 'New line' to draw either a new demand or supply curve that reflects the market effect of this event. Plot only the endpoints of the line.arrow_forward
- During the current pandemic, people have looked for additional opportunities for physical exercise and recreation. One particular form of physical recreation that has become increasingly popular is bicycling. In this question, we will examine the effects of the increased popularity of bicycling on the equilibrium price and quantity of bicycles.a) Result: state the effects of the increased popularity of bicycles on the equilibrium price and quantity of bicycles. b) Moral of the story: should you use this format for analyzing the effects of any change in demand or supply? c) Follow up to Moral of the Story: should you analyze any future test questions involving a change in demand or supply using this format?arrow_forwardQuestion: Consider a market for Ice Cream an inferior good in Pakistan. For each of the given events, identify which of the determinants of the demand or supply are affected. Also indicate whether demand or supply increase or decreases. Then draw a diagram to show the effect on the price and quantity of Ice Cream. 1) News reports claim that the consumption of Ice Cream is good for the health of coronavirus patients. 2) There has been a decline in wages of all employees in Pakistan due to the third wave of coronavirus. 3) People in Pakistan decide to have more children. 4) Students of NED University develop new automated machinery for the production of Ice Cream. 5. There has been a decrease in people’s income due to COVID-19 crisis. (1. identify which of the determinants of the demand or supply are affected. Also indicate whether demand or supply increase or decreases of each. 2. Then draw a diagram to show the effect on the price and quantity of Ice Cream of each.)arrow_forwardIn a given market, demand is described by the equation: QD=1800-10P And supply is described by QS=200+10P 1. Determine the equilibrium price and quantity 2. Graphically illustrate the equilibrium price and quantityarrow_forward
- What are the potential effects in the market for automobiles if consumers experience a decrease in their income. a) draw a supply/demand graph of the automobile market. b)indicate starting equilibrium price and equilibrium quantity. c) analyze graphically the effect of the change given above on equilibrium price and equilibrium quantity in the automobile market.arrow_forwardQuestion #1: On the news there has been outrage over the price of Epipens, a medication needed for allergic reactions to food and bee stings. The price of a two-pack of Epipens has risen from $100 to $600. The number of Epipens purchased fell from 1000 to 400. At the current time, there are no substitutes for this drug Will this increase in price cause a decrease in demand or a decrease in quantity demanded? Illustrate your answer graphically (either by showing a movement along the demand curve or by shifting the demand curve).arrow_forwardQuestion 1 Suppose that the demand for toy drums is described by the equation QD = 300 - 5p, and supply is QS = 60 + 3p, (1) What are the equilibrium price and quantity? (2) If a decrease in consumer income shifted the demand curve to QD’ = 220 - 5p, how does this change affect the equilibrium price and quantity? Show the solutions using a graph and calculate the numerical answer.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning