Answer to Question #133357 in Microeconomics for amna

Question

Price per Ice-cream (Rs.) Demand for Ice cream (Qd) Supply for Ice cream (Qs)

140 500 1500

120 750 1200

100 1000 1000

80 1250 750

60 1500 600

40 1750 300

) What is the maximum price that consumer is willing to pay for 1500 bottles?

(v) What is the minimum price that producer is willing to accept for 1500 bottles?

Answer 1

(iv) Answer:

Maximum price = Rs. 60

Solution

The price that corresponds to a quantity demanded of 1500 bottles is Rs. 60. Consumers are thus willing to pay Rs. 60 or less for 1500 bottles. Above Rs. 60 consumers reduce the quantity of bottles of ice cream demanded. Thus, Rs. 60 is the maximum acceptable amount by consumers for 1500 bottles.

(v) Answer:

Minimum price = Rs. 140

Solution

The price corresponding to a quantity supplied of 1500 bottles is Rs. 140. A price below Rs. 140 results in producers supplying less than 1500 bottles of ice cream. Therefore, Rs. 140 is the minimum acceptable price for 1500 bottles by producers.