Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 7P
Sub part (a):
To determine
The price and quantity of equilibrium.
Sub Part (b):
To determine
The price and quantity of equilibrium.
Sub Part (c):
To determine
The price and quantity of equilibrium.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Quantity
Demanded
6
7
8
9
10
11
12
Price
$8
7
6
5
4
3
2
Refer to the above table. If demand decreased by 4 units at each price and supply decreased by 2 units at each price,
what would the new equilibrium price and quantity be?
Multiple Choice
O $6 and 6 units
$5 and 5 units
O $4 and 6 units
Quantity
Supplied
10
9
8
7
6
5
4
$7 and 7 units
4. How will each of the following changes in demand and/or
supply affect equilibrium price and equilibrium quantity in a
competitive market; that is, do price and quantity rise, fall,
or remain unchanged, or are the answers indeterminate be-
cause they depend on the magnitudes of the shifts? Use sup-
ply and demand to verify your answers. LO3.5
a. Supply decreases and demand is constant.
b. Demand decreases and supply is constant.
c. Supply increases and demand is constant.
d. Demand increases and supply increases.
e. Demand increases and supply is constant.
f. Supply increases and demand decreases.
Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1
graph.
PRICE (Dollars per pen)
10
9
8
co
LO
5
+
3
2
1
0
0
1
Price
Quantity
2
Equilibrium Object
True
Scenario 2
3
False
Supply
4
5
6
7
QUANTITY (Millions of pens)
Demand
Scenario 1
8
9
Compare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them that
wasn't apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens.
10
Use the results of your answers on both the Scenario 1 and Scenario 2 graphs to complete the following table. Begin by indicating the overall change
in the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate the
resulting change in the equilibrium price and quantity when supply and demand shift in…
Chapter 4 Solutions
Microeconomics
Ch. 4.A - Prob. 1ADQCh. 4.A - Prob. 2ADQCh. 4.A - Prob. 3ADQCh. 4.A - Prob. 1ARQCh. 4.A - Prob. 2ARQCh. 4.A - Prob. 3ARQCh. 4.A - Prob. 1APCh. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQ
Ch. 4 - Prob. 4DQCh. 4 - Prob. 5DQCh. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 1RQCh. 4 - Prob. 2RQCh. 4 - Prob. 3RQCh. 4 - Prob. 4RQCh. 4 - Prob. 5RQCh. 4 - Prob. 6RQCh. 4 - Prob. 7RQCh. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7P
Knowledge Booster
Similar questions
- In November 2021, there is a simultaneous change in the market for Covid-19 vaccines in China. Total demand has increased by 50% and the supply increased by 70% in the domestic market due to technological advances in the production methods. What should you observe at the new market equilibrium point based on this situation? (Hint: both curves are normal in shapes) O a. Price decreases, equilibrium quantity exchanged decreases O b. Price decreases, equilibrium quantity exchanged increases O c. Price increases, equilibrium quantity exchanged increases d. Price increases, equilibrium quantity exchanged is undeterminedarrow_forwardPrice D1 $12 5 $10 8 $8 11 $6 13 18 $4 16 21 $2 18 24 D₂ 9 12 15 S1 19 17 15 13 11 9° S₂ 14 12 10 8 6 4 Suppose that D₁ and S₁ are the prevailing demand and supply curves for a product. If the demand schedule changes from D₁ to D 2, then equilibrium price increases from $6 to $8 O equilibrium quantity decreases from 15 to 13 O equilibrium price decreases from $6 to $4 equilibrium quantity increases from 13 to 18arrow_forward10:17 OT 1. A college student enjoys eating pizza. Her willingness to pay for each slice is shown in the following table: Number of pizza slices 7 1 2 3 4 5 6 7 Willingness to pay (per slice) $6 + LO 5 4 3 2 1 b. If the price of slices falls to $2, how much consumer surplus will she enjoy? O 3arrow_forward
- f 20 18 16 14 12 10 8 6 4 2 + Consumer 1 Demand 2 4 6 Figure 4-2 8 10 12 14 16 18 20 QUANTITY PRICE Refer to Figure 4-2. If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is O a. 0 units. Ob. 15 units. O c. 25 units. Od. 10 units. 30 27 24 21 18 15 12 9 6 3 Consumer 2 Demand 5 10 15 20 25 30 35 40 45 50 QUANTITYarrow_forwardConsumer Willingness to Pay Willingness to Accept Seller 5. Malcolm 20 Walter Hank Lois Francis 20 13 30 35 Saul Hal 30 Jesse Dewey Reese Skyler Gus 18 28 10 20 The table above shows the willingness to pay for the Wilkerson family and the willingness to accept for the White family. The two families are the only people in the market for the good. What is the equilibrium price in the market? O 10 O 20 O 13 O 30 O 5arrow_forwardQ3Use a matrix method to find the equilibrium prices and quantities where the supply and demand functionsfor Good 1, Good 2 and Good 3 are asQd1 = 50 − 2P1 + 5P2 − 3P3, Qs1 = 8P1 − 5Qd2 = 22 + 7P1 − 2P2 + 5P3, Qs2 = 12P2 − 5Qd3 = 17 + P1 + 5P2 − 3P3, Qs3 = 4P3 − 1arrow_forward
- a. b. Test Your Understanding Price Supply 1 $4.00 60 4.25 70 4.50 80 4.75 90 (5.00 100 5.25 110 5.50 120 What are equilibrium price and quantity? Supply increases by 50% - what are the new equilibrium price and quantity? Demand 140 130 120 110 100 90 80 2014 McGraw-Hill Ryerson Limited Supply 2 LO6 2-45arrow_forwardSuppose that supply and demand are given by the following equations: 2a=254P 25= -3 + 3P What is the equilibrium price? O a. 3 O b. 7 OC. 4 O d. 5arrow_forwardADVANCED ANALYSIS Assume the following values for the figures below Q_{1} = 20 bags Q_{2} = 15 bags. Q_{3}; =27 bags. The market equilibrium price is $45 per bag. The price at a is $85 per bag. The price at c is $5 per bag. The price at f is $59 per bag. The price at g $31 per bag. Apply the formula for the area of a triangle (Area=1/ 2 * Base*Height) to answer the following questions.arrow_forward
- 100 200 300 400 500 600 Quantity (millions of bushels of wheat) In the figure, the equilibrium price is initially $3 per bushel of wheat. If suppliers come to expect that. the price of a bushel of wheat will rise in the future, but buyers do not, the current equilibrium price will Select one: O a. not change. O b. Perhaps rise, fall, or stay the same, depending on whether there are more demanders or suppliers in the market. O c. rise. O d. fall. 4. 2. Price (dollars per bushel of wheatarrow_forwardWill the equilibrium price of orange juice increase or decrease in each of the following situations? LO7a. A medical study reporting that orange juice reduces cancer is released at the same time that a freak storm destroys half of the orange crop in Florida. The prices of all beverages except orange juice fall in half while unexpectedly perfect weather in Florida results in an orange crop that is 20 percent larger than normal.arrow_forwardSuppose there are two consumers in the market for a good, consumer 1's inverse demand function is p=80 – 24, and consumer 2s inverse demand function is p =36 - : Suppose further that the inverse market supply is p 20 + q. What is the competitive equilibrium? Oa. Competitive equilibrium price is 28 and competitive equilibrium quantity is 8 O b. Competitive equilibrium price is 40 and competitive equilibrium quantity is 8 O C Competitive equilibrium price is 40 and competitive equilibrium quantity is 20 O d. Competitive equilibrium price is 28 and competitive equilibrium quantity is 20arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education