Consider the following demand and supply function of product ZT: Qd = 25 - 1.25 P Qs = -9 + 3 P Note: Determine the equilibrium point first to answer the following question. compute also the sales tax in order to answer those ff questions 7. How much is the change in the price for the consumer, when additional sales tax is 0.85 per unit? Use a number, 2 decimal values, no commas, no space, no signs. * 8. How much is the buying price when sales

Consider the following demand and supply function of product ZT: Qd = 25 - 1.25 P Qs = -9 + 3 P Note: Determine the equilibrium point first to answer the following question. compute also the sales tax in order to answer those ff questions 7. How much is the change in the price for the consumer, when additional sales tax is 0.85 per unit? Use a number, 2 decimal values, no commas, no space, no signs. * 8. How much is the buying price when sales

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 4QP

See similar textbooks

Similar questions

If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?
Question 1 Think about the market for chocolate bars. Market research has revealed the demand and supply equations as follows: QD 1600- 200P Qs = 100+ 100P Where, P is the price in £ (UK pounds), QD and Qs are quantity demanded and supplied for the product, respectively. C) Compute the price elasticity of demand between the price of £3 and £4. Use the mid-point (arc) method (use 2 decimal places). D) If the market price is now at £3, should a chocolate bar firm increase its price to increase its total revenue? Explain why or why not. E) Give an example of an event that will shift the supply curve for the chocolate bars left. Explain the process of market adjustments after the shift in words and in a graph.
1. Given the estimated market demand and supply functions for coffee as: Qxd= 85.6 –10Px –3Ps +Y and Qs= 96 + 5Px - 2Pc, respectively, where Qd is the quantity demand, Qs is the quantity supplied, Px= price of coffee, Ps= price of sugar =$0.20; Y= $55,000 (note: Y is income measured in thousands, so the value to use here is $55), and Pc= price of cream=$5. a. Find the demand function at the given values for Ps, Y, and Pc.b. Find the supply function at given value of the price of cream (Pc). c. Based on your answers to questions (a) and (b), what is the market equilibrium price and quantity for coffee. d. List the factors which affect the demand and supply sides of the market for coffee.
Suppose the supply and demand curves for a particular product are given by Qs=-20+2p Qd=100-2p Where Qs and Qd are quantities in units and P is the price per unit. Graph the supply and demand curves. Be sure to calculate the P and Q intercepts for demand and the P intercept for supply. Calculate and illustrate the equilibrium price and quantity. Calculate both the demand and supply elasticity around the equilibrium point. Suppose the government implements a price ceiling of $20/unit in this market. Is the price ceiling binding on the market? What are the quantities demanded and supplied at the price ceiling? How many units are exchanged at this price? Given the effects of the policy, is there a potential for illegal trade? Briefly explain your answers where necessary. What is the value of the economic surplus that would be generated in the original equilibrium? Is there a deadweight loss due to the price ceiling policy, and if so, what is its value? Briefly explain.
The annual demand for imported oranges is given by the following equation:QD = 600,000 − 30,000Pwhere P is the price per kilogram and QD is quantity of kilograms demanded per year.The supply of imported oranges is given by the equation:QS = 20,000P Calculate the following: ii. the amount of revenues collected
a)When John can sell totem poles for 1,800 each, he markets 60 annually. when the price falls to $600 each, he is willing to sell only 24 each year. What is his price elasticity of supply ? b) government pays attention to the elasticity of demand when selecting foods and services upon which to levy excise taxes. Assume a $1.00 tax is levied on some good and 10,000 units are sold. What is the tax revenue collected ?
Suppose that the market demand for Turkey is given by: Q_(T)=2-8P_(T)+2P_(C)+0.0015I Where Q_(T) is annual quantity demanded of turkey in million pounds, P_(T) is the price of turkey per pound, P_(C) is price of chicken per pound, and I is the average household income in dollars per year. a. Find the annual quantity demanded of turkey if the price turkey is $2.00 per pound, price of chicken is $1.50 per pound and the annual household income is $30,000.
Solve subpart 4. Suppose the supply and demand curves for a particular product are given by Qs=-20+2p Qd=100-2p Where Qs and Qd are quantities in units and P is the price per unit. Graph the supply and demand curves. Be sure to calculate the P and Q intercepts for demand and the P intercept for supply. Calculate and illustrate the equilibrium price and quantity. Calculate both the demand and supply elasticity around the equilibrium point. Suppose the government implements a price ceiling of $20/unit in this market. Is the price ceiling binding on the market? What are the quantities demanded and supplied at the price ceiling? How many units are exchanged at this price? Given the effects of the policy, is there a potential for illegal trade? Briefly explain your answers where necessary. What is the value of the economic surplus that would be generated in the original equilibrium? Is there a deadweight loss due to the price ceiling policy, and if so, what is its value? Briefly explain.
Goods A and B are related goods. The price of good A is $10. When the price of good B is $4, demand for good A is P = 14 - 0.004QA. When the price of good B is $5, demand for good A is P = 16 - 0.0025QA- Calculate the cross price elasticity of demand. *"If the answer is negative you must enter the - sign. ** "Remember to maintain several significant digits during the calculation and leave two numbers after the decimal point when entering the final answer.* Answer:
Consider the following demand and supply relationships in the market forgolf balls: Qd = 90 - 2P - 2T and Qs = -9 + 5P - 2.5R, where T is the price oftitanium, a metal used to make golf clubs, and R is the price of rubber.a. If R = 2 and T = 10, calculate the equilibrium price and quantity of golfballs.b. At the equilibrium values, calculate the price elasticity of demand and theprice elasticity of supply.
The initial price of a cup of coffee is $1, and at that price, 400 cups are demanded. If the price falls to $0.90, the quantity demanded will increase to 500. Calculate the (arc) price elasticity of demand for coffee. Based on your answer, is the demand for coffee elastic or inelastic? Based on your answer to a., if the price of coffee is increased by 10%, what will happen tothe revenues from coffee? Carefully explain how you know.
Consider the following demand and supply relationships in the market forgolf balls: Qd = 90 - 2P - 2T and Qs = -9 + 5P - 2.5R, where T is the price oftitanium, a metal used to make golf clubs, and R is the price of rubber.a. If R = 2 and T = 10, calculate the equilibrium price and quantity of golfballs.b. At the equilibrium values, calculate the price elasticity of demand and theprice elasticity of supply.c. At the equilibrium values, calculate the cross-price elasticity of demand forgolf balls with respect to the price of titanium. What does the sign of this elasticity tell you about whether golf balls and titanium are substitutes orcomplements?