# Your supervisor, Jorge, has assigned you the task of evaluating a new product. The new pro

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Question description

Jorge, has assigned you the task of evaluating a new product. The new product,
oven mittens, has several competitors in the marketplace, but your company will
be using a new patented material that provides protection from heat and maintains
a great deal of flexibility. The supply and demand functions for oven mittens
are as follows:

Qd =
45 – 6.9P

Qs =
–15 + 10P

where Qd
is the quantity demanded, Qs the quantity supplied, and P the
price.

you to research the market and provide detailed responses to the following
questions:

• What
is the equilibrium price and quantity for oven mittens? Using Microsoft
Excel, construct a table that shows the quantity demanded, the quantity
supplied, and the surplus or shortage associated with prices from \$2 to
\$5.55. (Use appropriate intervals.) Indicate the level at which
equilibrium is achieved. Graph the data, indicating the equilibrium level
and the areas of shortage or surplus.

• If
a price floor were established at \$4, what would happen in this market?

• If
a price ceiling were established at \$3, what would happen in this market?

• What
will happen to the demand curve for the product if the following changes
occur? Answer separately for each change, assuming each event to be
independent of the other:

•
• The price of the substitute Good A increases.

The price of the complementary Good C
increases.

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