ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 4, Problem 5.10P
To determine
Reason behind raising the price in case of market shortage and why would consumer accept it?
Concept Introduction:
Market shortage refers to a situation in which quantity demanded of the good is greater than the quantity supplied.
Expert Solution & Answer
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Students have asked these similar questions
L. At a price of $2.28 per bushel, the supply of barley is 7, 500 million bushels and
the demand is 7,900 million bushels. At a price of $2.37 per bushel, the supply
of barley is 7,900 million bushels and the demand is 7, 800 million bushels.
(A) Find a price-supply equation of the form p ma+ b.
(B) Find a price-demand equation of the form p mx+ b.
(C) Find the equilibrium point.
QUESTION 7
The demand for rubber erasers consists of two components. The first component is the demand for rubber erasers by art students. This demand is given by QA = 19,500 -
325P. The second component is the demand for rubber erasers by all others. This demand is given by Qo = 32,000 - 2,000P.
(a) What is the total quantity demanded of rubber erasers if the price of an eraser is:
(i) $10
(ii) $15
(iii) $20
(iv) $30
(v) $70
(b) Assume that the supply of rubber erasers is given by Qs = 14,000+ 175P.
(i) Find the equilibrium price and the equilibrium quantity.
(ii) Calculate the total consumer surplus. [Hint: It may be easier if you calculate the consumer surplus for art students and the consumer surplus for all others
separately, and then add them up.]
(c) Assume that the supply of rubber erasers is given by Qs = 8,390 + 180P. Find the equilibrium price and the equilibrium quantity.
10 (DC)
EN510
11. Study Questions and Problems #11
Initially, a market is in equilibrium, but then both demand and supply decrease. Suppose that the magnitude of the shift in demand is
greater than the shift in supply.
Use the graph input tool to help you answer the following question. You will not be graded on any changes you make to this graph.
PRICE
QUANTITY
Supply
Demand
As a result of the supply and demand shifts, the price will
Demand
--
Supply
, and the quantity will
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