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Use the following functions that show quantity demanded and quantity supplied to answer the question.
Qd = 600 - 30p
Qs = -300 + 120p
If the price is R8, then there will be a surplus of _____ units.
If the equation for a market demand curve is Qd = 100 – 0,5P and the equation for a market supply curve is Qs = –20 + P, the market equilibrium quantity is:
Given the demand for a product as Qd = 100 - 5P and the supply is given as Qs = -20 + 3p. You are told equilibrium is obtained at the point where Qd = Qs. The equilibrium price for the product is
Suppose a certain contractor wants to maximize profit from building one bridge. The
contractor uses both labor and capital, and efficient combinations of Labor and capital
that are sufficient to make a bridge is by the function 0.75L1/2 K 1/2. If the prices of labor
(w) and capital (r) are $ 6 and $ 16 respectively
A) Find the least cost combination of L and K?
B) Find the minimum cost?
Consequence
A 40 percent price reduction of The Times led to a 17.5 per
cent increase in its sales.
Price elasticity of demand for The Times: -0.44
Note: The revenue earned by The Times fell from
£169,576 to £134,689!
Competing papers suffered!
Independent suffered most, with a 15.2 percent loss of sales,
indicating a cross-price elasticity of 0.38
Cross-price elasticity for the Guardian was 0.11, and that for
the Daily Telegraph was 0.05.
Implications?
What do you expect would happen to the sales of The Financial
Times?
Why did The Times adopt a strategy of price cut?
In South Africa, cigarettes are forbidden, so people trade cigarettes in a black market. The cigarette demand is 𝑄𝐷 = 12 − 𝑝, and cigarette supply is 𝑄𝑆 = 2𝑝. (5) Find the equilibrium price and quantity in the black market. Interpret your results The government becomes aware of the black market and reinforces the polices that half of the cigarette supply would be seized and destroyed. Under this circumstance, what are the demand and supply functions? What is the new equilibrium price and quantity? Show the change by using a supply and demand diagram. (6) How does the consumer surplus change between (a) and (b)? Calculate total surplus. (4)
The price of pork falls in the market. Discuss using a diagram the substitution and income effects to the purchase of pork given the lower price. How is this related to the law of demand?
Given demand equation P=50-2Qd and supply equation P=10+2Qs calculate.
(a) consumer surplus
(b) producer surplus
(c) total surplus
assuming pure competition
Sadiq is thinking about opening a hardware store. He estimates that it would cost Rs.3,500,000 per year to rent the location and buy the merchandise. In addition, he would have to quit his Rs.800,000 per year job as a financial analyst.
- What is Sadiq’s opportunity cost of running the store for a year?
- Sadiq thinks he can sell Rs.4,200,000 worth of hardware in a year. What would his accountant consider the store’s profit?
- How much revenue would the store need to generate for Sadiq to earn zero economic profit?
Hira has Rs.1200 a week to spend on yogurt and mangoes. The price of yogurt is Rs.200, and mangoes are Rs.400 a box. (Hint: Quantity of mangoes to be plotted on the x-axis of the budget line)
How do Hira’s budget line change if, other things remaining the same,
Rotate outward
Rotate inward
Shift parallel outward
Shift parallel outward
Bend inside from the middle
Bend outside from the middle
The price of mangoes falls?
Hira’s income increases?
The price of yogurt rises?
Hira’s income decreases?
A.Shift parallel outward
B.Shift parallel inward
C.Rotate outward
D.Rotate inward
E.Bend outside from the middle
F.Bend inside from the middle
