EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 8, Problem 7RQ
To determine
Find out the number of copies of the book that the professor wishes to sell based on the given condition and also find out if it is the same number that the professor is seeking to sell.
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Suppose that managers at Honda are deciding how to price the new Honda Accord. The managers estimate that their total costs
increase by $20,000 for each car they produce. They also estimate the demand curve they face; it is described by the equation:
Q = -0.4 P + 16,000,
where Q represents the quantity of Honda Accords they will sell and P represents the price they charge in US dollars.
We can re-write that demand curve as:
P = 40,000 - 2.5 Q.
Take every possibly quantity that the managers might choose between
and 7,000 in units of 100. For each possible quantity,
calculate the associated price the managers would need to charge, the revenue they would earn, and the total costs. You can then
calculate profits for each level of quantity. Highlight the cell that contains the highest value of profit.
Finally, you can also approximate marginal revenue here as the change in total revenue after the next 100 cars are produced. At what
quantity does marginal revenue roughly equal marginal cost?…
Suppose that managers at Honda are deciding how to price the new Honda Accord. The managers estimate that their total costs increase by $20,000 for each car they produce. They also estimate the demand curve they face; it is described by the equation:
Q = -0.4 P + 16,000,
where Q represents the quantity of Honda Accords they will sell and P represents the price they charge in US dollars.
We can re-write that demand curve as:
P = 40,000 - 2.5 Q.
Take every possibly quantity that the managers might choose between 0 and 7,000 in units of 100. For each possible quantity, calculate the associated price the managers would need to charge, the revenue they would earn, and the total costs. You can then calculate profits for each level of quantity. Highlight the cell that contains the highest value of profit.
At the start of 2010 the UK was hit by extremely cold weather including snow and ice. As a result there was a major increase in demand for salt to put on the roads to make them safer. However, the supply of salt in the UK comes mainly from three salt mines; one in Cheshire, one in Cleveland, and one in County Antrim. The shortage was so great that at one point the government ordered councils to use less grit on the roads and stopped gritting the hard shoulder of the motorways. Problems in the past meant councils had been instructed to hold a few days worth of stock of salt but this was not enough to make the roads safe in what was the coldest period since 1963.
Questions
Explain the supply curve that would represent the supply of salt in the short run.
Why do councils keep stocks of salt?
Add to your first diagram a long run supply curve for salt; explain your diagram.
Chapter 8 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 8.3 - Prob. 1MQCh. 8.3 - Prob. 2MQCh. 8.3 - Prob. 1.1MQCh. 8.3 - Prob. 2.1MQCh. 8.4 - Prob. 1TTACh. 8.4 - Prob. 2TTACh. 8.4 - Prob. 1MQCh. 8.4 - Prob. 2MQCh. 8.5 - Prob. 1TTACh. 8.5 - Prob. 2TTA
Ch. 8.5 - Prob. 1.1TTACh. 8.5 - Prob. 2.1TTACh. 8.5 - Prob. 1MQCh. 8.5 - Prob. 2MQCh. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQCh. 8 - Prob. 8.1PCh. 8 - Prob. 8.2PCh. 8 - Prob. 8.3PCh. 8 - Prob. 8.4PCh. 8 - Prob. 8.5PCh. 8 - Prob. 8.6PCh. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.10P
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- At the start of 2010, the UK was hit by extremely cold weather including snow and ice. As a result, there was a major increase in demand for salt to put on the roads to make them safer. However, the supply of salt in the UK comes mainly from three salt mines; one in Cheshire, one in Cleveland, and one in County Antrim. The shortage was so great that at one point the government ordered councils to use less grit on the roads and stopped gritting the hard shoulder of the motorways. Problems in the past meant councils had been instructed to hold a few days worth of stock of salt but this was not enough to make the roads safe in what was the coldest period since 1963. Questions Add to your first diagram a long-run supply curve for salt; explain your diagram.arrow_forwardAt the start of 2010, the UK was hit by extremely cold weather including snow and ice. As a result, there was a major increase in demand for salt to put on the roads to make them safer. However, the supply of salt in the UK comes mainly from three salt mines; one in Cheshire, one in Cleveland, and one in County Antrim. The shortage was so great that at one point the government ordered councils to use less grit on the roads and stopped gritting the hard shoulder of the motorways. Problems in the past meant councils had been instructed to hold a few days worth of stock of salt but this was not enough to make the roads safe in what was the coldest period since 1963. Questions Why do councils keep stocks of salt?arrow_forwardAt the start of 2010, the UK was hit by extremely cold weather including snow and ice. As a result, there was a major increase in demand for salt to put on the roads to make them safer. However, the supply of salt in the UK comes mainly from three salt mines; one in Cheshire, one in Cleveland, and one in County Antrim. The shortage was so great that at one point the government ordered councils to use less grit on the roads and stopped gritting the hard shoulder of the motorways. Problems in the past meant councils had been instructed to hold a few days worth of stock of salt but this was not enough to make the roads safe in what was the coldest period since 1963. Questions Sketch a supply curve that represents the supply of salt in the short run. Explain your diagram.arrow_forward
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