Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter P2, Problem 3KC
To determine
The
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Text Problem 19-16
An increase in the market price of men's haircuts, from $16 per haircut to $26 per haircut, initially causes a local barbershop to have its employees work overtime to
increase the number of daily haircuts provided from 25 to 30. When the $26 market price remains unchanged for several weeks and all other things remain equal as
well, the barbershop hires additional employees and provides 45 haircuts per day.
What is the short-run price elasticity of supply?
(Your answer should have two decimal places.)
Suppose that supply and demand for a certain commodity are described by the supply curve, p = 0.0002q + 0.03 and demand curve, p = - 0.001q + 35.31. Determine the quantity of the commodity that will be produced and the selling price.
The quantity of the commodity that will be produced is
Draw a supply and demand graph showing an equilibrium price of $50 and an equilibrium quantity of 200 units. Explain what would happen if the selling price was $75, and illustrate this on the graph. Explain what would happen if the selling price was $25, and illustrate this on the graph. Be sure to label each axis and curve on the graph.
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Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
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- If the current price of a good is $10, market demand is Qd = 400 - 20P, and market supply is Qs = -50 + 10P, then more of the good is being produced than people want to buy. a lower price will increase the shortage. at the current price there is excess demand, or a shortage, of 150 units. a lower price will increase the shortage and at the current price there is excess demand, or a shortage, of 150 units. All of the abovearrow_forwardIn the supply equation; [Qdx=Px+1600], if Qdx=5688, then the price of the product is. Select one: a. 9100800.00 b. 4088.00 c. -4088.00 d. 7288.00arrow_forwardRefer to the figure below, which shows the market for a specific good. What will be the result if the producer prices this product at $70? Price $100 90 80 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 80 90 100 Quantity per period Select one: There will be an upward pressure on the price b. The consumers plan to buy 70 units There will be a shortage of 40 units d. 50 units will be bought and sold None of the above O e. a.arrow_forward
- The market equilibrium point for a product is reached when 6000 units are produced and sold at $21 per unit. The manufacturer will not produce any units at the price of $5, and the customers will not buy any at the price of $69. Find the supply and demand equations, assuming they are linear. The equations should express price p in terms of quantity q. a. Supply equation P= b. Demand equation P=arrow_forwardThe demand for computers is QD=13−2P, where P is the price of computers. Initially, the supply of computers is QS=4+P. Use the demand equation above to plot the demand curve. 1.) Using the line drawing tool, accurately draw the demand curve. Draw the curve for quantities from at least 1 to 11. Properly label your line. 2.) Using the point drawing tool, indicate the equilibrium price and quantity. Label your point 'E1'. Carefully follow the instructions above and only draw the required objects. The equilibrium price is... per computer. (Round your response to one decimal place.) The equilibrium quantity is......computers per week. (Roundyour response to the nearest nteger.) Suppose the prices of memory chips and motherboards (two important components in computers) rise and as a consequence, the supply curve for computers becomes QS=P. In a supply-and-demand diagram, accurately show the effect of the increase in the prices…arrow_forward09. Which of the following statements is False? a) Supply is a relationship between price and quantity. b) Demand represents the willingness and ability of buyers to buy quantities of a good at various prices. c) The demand relationship represents the specific quantity of a good demanders have bought. d) All of the above e) None of the abovearrow_forward
- The following relations describe monthly demand and supply for a computer support service catering to small businesses.Q D = 3,000 - 10PQ S = -1,000 + 10Pwhere Q is the number of businesses that need services and P is the monthly fee, in dollars.a. At what average monthly fee would demand equal zero?b. At what average monthly fee would supply equal zero?c. Plot the supply and demand curves.d. What is the equilibrium price/output level?e. Suppose demand increases and leads to a new demand curve:arrow_forwardSuppose the demand for a certain item is given by D(p) = - 2p? - 4p + 500, where p represents the price of the item in dollars. a. Find the rate of change of demand with respect to price b. Find and interpret the rate of change of demand when the price is $8. a. The rate of change of demand with respect to price is- (Simplify your answer.) b. Choose the correct answer below and fill in any answer boxes in your choice. O A. When the price is $8, demand is increasing at a rate of about items for each increase in price of $8. O B. When the price is $8, demand is decreasing at a rate of about items for each increase in price of $8. OC. When the price is $8, demand is decreasing at a rate of about items for each increase in price of $1. O D. When the price is $8, demand is increasing at a rate of about items for each increase in price of $1.arrow_forwardRefer to the market demand and supply functions below: Qd=71,000 – 2,000P Qs = - 25,000 +25,000P What is the equilibrium price (Pe)? Round off to 6 decimals.arrow_forward
- The table represents the demand for and supply of ice cream. Price per unit (P) 150 120 90 60 30 0 Quantity demanded 3 6 9 12 15 18 Quantity supplied 21 18 15 12 9 6 When the price is equal to 120, what condition exists in the ice cream market? Identify the equilibrium price and quantity in the market for ice cream. Draw a diagram to depict your answers to (a) and (b).arrow_forwardProjected Effects of Different Prices on Sales Increased Price or Increased Sales? An increase in the price of an item may not produce an increase in sales revenue. Price per Item x Quantity Sold Sales Revenue $50 200 $10,000 $45 250 $11,250 $40 280 $11,200 $35 325 $11,375 $30 400 $12,000 $25 500 $12,500 Explain why an increase in price does not always mean an increase in revenue.arrow_forward11.)Which of the following demand curves DOES NOT satisfy the law of demand? a.) pD = 16+ QD 1 b.) pD = 3 –x QD - с.) pD d.) All of these demand curves satisfy the law of demand 100,000 – 163 × QD 12.) Which of the following is NOT a supply shifter? a.) Change in technology b.) Change in the price of complements c.) Change in the price of inputs d.) Expectations of future pricearrow_forward
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