Problem Set 3 Economics Homework

Anonymous
timer Asked: Feb 6th, 2019
account_balance_wallet $30

Question Description

4 question economics homework. you can print and answer the questions then scan them. Thanks

Unformatted Attachment Preview

Problem Set 3 Name: _____________________________ Due February 6th, 2019 1. Assume the market for fruit from a local fruit stand has the supply and demand curves given below. Demand: P = 150 – 3*Q Supply: P = 10 + Q a. Graph supply and demand. Be sure to label all intercepts. b. If P = $60, what quantity of fruit will consumers want to buy? c. If P = $60, what quantity of fruit will firms want to sell? d. Find equilibrium price and quantity in the market for fruit, and label it on your graph. 2. A recent survey indicated that chocolate is America’s favorite ice cream flavor. For each of the following, indicate the possible effects on demand, supply, or both, as well as the effect on the equilibrium price and quantity in the market for chocolate ice cream. a. A severe drought in the Midwest increases the cost of grain fed to the dairy cows. b. A new report by the American Medical Association reveals that chocolate does, in fact, have significant health benefits. c. The discovery of a new dairy alternative lowers the price of dairy-free frozen treats. d. New technology for mixing and freezing ice cream lowers manufacturers’ costs of producing chocolate ice cream. e. Consumer income decreases due to a recession. (You may assume that chocolate ice cream is a normal good.) 3. Suppose you operate your own business selling t-shirts. The demand curve for t-shirts is 𝑃 = 40 − 2 ∙ 𝑄. Right now, the price of t-shirts is $30 and you sell 5 t-shirts per day. a. Calculate your daily total revenue (TR). b. Calculate the price elasticity of demand when P=$30. c. Is demand elastic, inelastic or unit elastic at this point? d. If the price of t-shirts increases, will your total revenue increase or decrease? e. What price would result in the maximum total revenue (TR)? 4. On Monday, Maggie worked all day selling cookies and her total revenue was $50. On Tuesday Maggie decided to raise her prices so that she could make more money, but at the end of the day on Tuesday she had only made $40. Maggie is confused, and comes to you for advice. Explain why this happened using your knowledge of price elasticity. ...
Purchase answer to see full attachment

Tutor Answer

Juniper
School: Boston College

Hello buddy, kindly find your paper attached below. Let me know what you think. Thank you

Problem Set 3

Name: _____________________________

Due February 6th, 2019
1. Assume the market for fruit from a local fruit stand has the supply and demand curves given
below.
Demand: P = 150 – 3*Q
P

60

*

50

*

30

*

20
10

*
E *

Pe
40


Supply: P = 10 + Q

*

*

*

S

*
D
10

20

e

30 Q

40

50

a. Graph supply and demand. Be sure to label all intercepts.
b. If P = $60, what quantity of fruit will consumers want to buy?
What consumers would want to buy when P=$60
P=150-3Q
60= 150-3Q
Q= (150-60)/3
=30units

c. If P = $60, what quantity of fruit will firms want to sell?
What firms would sell when P=$60

60

Q

P=10+Q
60= 10+Q
Q= 60-10
=50 units

d. Find equilibrium price and quantity in the market for fruit, and label it on your graph.
At equilibrium price and qua...

flag Report DMCA
Review

Anonymous
awesome work thanks

Similar Questions
Hot Questions
Related Tags
Study Guides

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors