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assuming competitive markets use supply and demand graphs to appraise:
A. assume the supply curve for medical care is positivily sloped and dmand curve is negatively sloped. Assume that 20% of them he population does not have insurance. A new law is passed that provides insurance to everyone as a result the equilibrium price & quantity of car will both rise.
B. Also assume supply curve is horizontal(flat) & will have no effect on equilibrium price & quantity compared with results in part (a).
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Using D/S Model to Investigate Non-Price Determinants of Demand 1. Text ch 3 Prob 6. Joy’s Frozen Yogurt shops have enjoyed rapid growth in northeastern states in recent years. From the analysis of Joy’s various outlets, it was found that the demand curve follows this pattern: Q = 200 - 300P + 120I +65T - 250Ac + 400Aj where Q = number of cups served per weekP = average price paid for each cupI = per capita income in the given market (thousands of dollars)T = average outdoor temperatureAc = competition’s monthly advertising expenditures (thousands of dollars)Aj = Joy’s own monthly advertising expenditures (thousands of dollars)One of the outlets has the following conditions: P = 1.5, I = 10, T = 60, Ac = 15, Aj = 10.Estimate the number of cups served per week by this outlet. Determine the outlet’s demand curve.What would be the effect of a 5 thousand dollar increase in the competitor’s advertising expenditure? What would Joy’s advertising expenditure have to be to counteract this effect?2. Text ch 3 Prob 9. Suppose a firm has the following demand equation: Q = 1,000 - 3,000P + 10A where Q = quantity demanded P = product price (in dollars) A = advertising expenditures (in dollars) Assume for the following questions that P = $3 and A = $2,000.Suppose the firm dropped the price to $2.50. Would this be beneficial for the firm? Explain. Suppose the firm raised the price to $4.00 while increasing its advertising expenditure by $100. Would this be beneficial for the firm? Explain. Comparative Statics 3. Refer to the graph that follows, which represents a theoretical D/S model with a market in equilibrium at price P* and quantity Q*.Assume that this product is endorsed by a popular sports figure and as a result becomes more popular. In the immediate future (short run), which way will the demand curve shift (left or right)? Will the new equilibrium price be (higher or lower)? Will the new equilibrium quantity be (higher or lower)?Consider again the situation in part a. If this is a competitive market, what will happen to equilibrium quantity in the LONG run? To equilibrium price in the LONG run?Begin again with the initial equilibrium. Assume now that a natural disaster destroys a factory where this product is produced. Will the immediate impact be on the demand curve or on the supply curve? Which way will the curve shift (left or right)? Will the new equilibrium price be (higher or lower)? Will the new equilibrium quantity be (higher or lower)?Consider again the situation in part c in which a natural disaster occurs. If this is a competitive market, what will happen to equilibrium quantity in the LONG run? To equilibrium price in the LONG run?Price Elasticity of Demand 4. Text ch 4 Prob 13. According to a study, the price elasticity of shoes in the United States is 0.7, and the income elasticity is 0.9. Would you suggest that the Brown Shoe Company cut its prices to increase its revenue?What would be expected to happen to the total quantity of shoes sold in the United States if incomes rise by 10 percent?5. Text ch 4 Prob 17 adapted. The demand curve for product “a” is given as Q = 2000 -20P and the price is currently P = $70.How many units will be sold at $70? At $80?What is the price elasticity between $70 and $80? Use the “arc elasticity” method found on page 70 and shown here: Arc Elasticity = Q2 - Q1(Q1 + Q2)/2P2 - P1(P2 + P1)/2Based on this measure, is demand price elastic? Based on this measure, do you expect total revenue to increase or to decrease if the price is raised to $80?What will be the total revenue at a price of $70? What will be the total revenue at a price of $80?Be sure that your answer to part “d” is consistent with your answer to part “c.” (If it is not, go back and check for errors.)
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5 pages
Econ201 Assignment 3 Final
The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. Students are advised to make their ...
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The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. Students are advised to make their work clear and well ...
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Using D/S Model to Investigate Non-Price Determinants of Demand 1. Text ch 3 Prob 6. Joy’s Frozen Yogurt shops have enj ...
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Using D/S Model to Investigate Non-Price Determinants of Demand 1. Text ch 3 Prob 6. Joy’s Frozen Yogurt shops have enjoyed rapid growth in northeastern states in recent years. From the analysis of Joy’s various outlets, it was found that the demand curve follows this pattern: Q = 200 - 300P + 120I +65T - 250Ac + 400Aj where Q = number of cups served per weekP = average price paid for each cupI = per capita income in the given market (thousands of dollars)T = average outdoor temperatureAc = competition’s monthly advertising expenditures (thousands of dollars)Aj = Joy’s own monthly advertising expenditures (thousands of dollars)One of the outlets has the following conditions: P = 1.5, I = 10, T = 60, Ac = 15, Aj = 10.Estimate the number of cups served per week by this outlet. Determine the outlet’s demand curve.What would be the effect of a 5 thousand dollar increase in the competitor’s advertising expenditure? What would Joy’s advertising expenditure have to be to counteract this effect?2. Text ch 3 Prob 9. Suppose a firm has the following demand equation: Q = 1,000 - 3,000P + 10A where Q = quantity demanded P = product price (in dollars) A = advertising expenditures (in dollars) Assume for the following questions that P = $3 and A = $2,000.Suppose the firm dropped the price to $2.50. Would this be beneficial for the firm? Explain. Suppose the firm raised the price to $4.00 while increasing its advertising expenditure by $100. Would this be beneficial for the firm? Explain. Comparative Statics 3. Refer to the graph that follows, which represents a theoretical D/S model with a market in equilibrium at price P* and quantity Q*.Assume that this product is endorsed by a popular sports figure and as a result becomes more popular. In the immediate future (short run), which way will the demand curve shift (left or right)? Will the new equilibrium price be (higher or lower)? Will the new equilibrium quantity be (higher or lower)?Consider again the situation in part a. If this is a competitive market, what will happen to equilibrium quantity in the LONG run? To equilibrium price in the LONG run?Begin again with the initial equilibrium. Assume now that a natural disaster destroys a factory where this product is produced. Will the immediate impact be on the demand curve or on the supply curve? Which way will the curve shift (left or right)? Will the new equilibrium price be (higher or lower)? Will the new equilibrium quantity be (higher or lower)?Consider again the situation in part c in which a natural disaster occurs. If this is a competitive market, what will happen to equilibrium quantity in the LONG run? To equilibrium price in the LONG run?Price Elasticity of Demand 4. Text ch 4 Prob 13. According to a study, the price elasticity of shoes in the United States is 0.7, and the income elasticity is 0.9. Would you suggest that the Brown Shoe Company cut its prices to increase its revenue?What would be expected to happen to the total quantity of shoes sold in the United States if incomes rise by 10 percent?5. Text ch 4 Prob 17 adapted. The demand curve for product “a” is given as Q = 2000 -20P and the price is currently P = $70.How many units will be sold at $70? At $80?What is the price elasticity between $70 and $80? Use the “arc elasticity” method found on page 70 and shown here: Arc Elasticity = Q2 - Q1(Q1 + Q2)/2P2 - P1(P2 + P1)/2Based on this measure, is demand price elastic? Based on this measure, do you expect total revenue to increase or to decrease if the price is raised to $80?What will be the total revenue at a price of $70? What will be the total revenue at a price of $80?Be sure that your answer to part “d” is consistent with your answer to part “c.” (If it is not, go back and check for errors.)
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InstructionsSubmit a draft of Component 1: Section II. Analyze the position of Walt Disney Company and determine whether ...
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InstructionsSubmit a draft of Component 1: Section II. Analyze the position of Walt Disney Company and determine whether the company regressed or improved financially over the past three years.To complete this assignment, review the Rubric document.Your draft must contain all of the elements listed above. It should be at least 4 pages in length (excluding the title page, references, supporting calculations, and appendices) and should follow APA guidelines. You must include calculations and appropriate graphs, tables, references, and other appendices as needed to support your written analysis. Cite your sources within the text of your paper and on the reference page.Do not make plagiarism and I will check it by turnitin.
California Career College Benefits of Economic Growth Discussion
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Questions answered in the peer review.If the economy were close to high potential output, would policymakers present their policy prescriptions to increase real output any differently than if the economy were far from potential output? Why?Have the poor benefited more or less from economic growth than the rich?Your Task: Read the posting of your colleagues to further the discussion. Simply saying "I agree, great point, etc" is not a sufficient peer review. You must discuss your peer's argument with detailed evidence (include citations). (minimum of 100 words)Please note! Friendly greetings and compliments are not included in the word count.Discussions and responses must show evidence of knowledge of facts pertaining to the issues being discussed and must attempt to apply the economic terms, ideas, and theories.
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