« previous next »

Author Question: The following equations represent the demand and supply for kumquats. QD = 60 - 3P QS = -20 + 5P ... (Read 103 times)

fahad

  • Hero Member
  • *****
  • Posts: 570
on: Jun 29, 2018
The following equations represent the demand and supply for kumquats.
  QD = 60 - 3P
  QS = -20 + 5P
 
  What is the equilibrium price (P) and quantity (Q - in thousands) of kumquats?
  A) P = 20; Q = 10 thousand B) P = 5; Q = 20 thousand
  C) P = 30; Q = 5 thousand D) P = 10; Q = 30 thousand

Question 2

If the price elasticity of demand for chocolate is -2.0 what should we expect would happen to consumption of chocolate if the price falls by 10? What about a 50 decrease?
 
  What will be an ideal response?


lcapri7

  • Sr. Member
  • ****
  • Posts: 350
Reply #1 on: Jun 29, 2018
Answer to Question 1

D

Answer to Question 2

Consumption of chocolate should increase by 20. If the price falls by 50 the increase in consumption may be less than 100. The reason is that price cut is moving consumers into the inelastic portion of the demand curve. In other words, the absolute value of the price elasticity of demand for chocolate may no longer be 2.0 but rather much lower and even be less than 1.0.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Before a vaccine is licensed in the USA, the Food and Drug Administration (FDA) reviews it for safety and effectiveness. The CDC then reviews all studies again, as well as the American Academy of Pediatrics and the American Academy of Family Physicians. Every lot of vaccine is tested before administration to the public, and the FDA regularly inspects vaccine manufacturers' facilities.

Did you know?

Your chance of developing a kidney stone is 1 in 10. In recent years, approximately 3.7 million people in the United States were diagnosed with a kidney disease.

Did you know?

Approximately 15–25% of recognized pregnancies end in miscarriage. However, many miscarriages often occur before a woman even knows she is pregnant.

Did you know?

Women are two-thirds more likely than men to develop irritable bowel syndrome. This may be attributable to hormonal changes related to their menstrual cycles.

Did you know?

Fewer than 10% of babies are born on their exact due dates, 50% are born within 1 week of the due date, and 90% are born within 2 weeks of the date.

Interior nodes represent common ancestors Interior nodes represent common ancestors
Defibrillator. Defibrillators are devices that supply a voltage charge to the heart in the hope of r Defibrillator. Defibrillators are devices that supply a voltage charge to the heart in the hope of r
Equations Equations
Values, both those held by individuals and those that represent a nation or people, can undergo deep ... Values, both those held by individuals and those that represent a nation or people, can undergo deep ...
The ability to roll the tongue is one of several traits that represent the dominant allele. The ability to roll the tongue is one of several traits that represent the dominant allele.
China has relied on cheap coal to meet its demand for energy China has relied on cheap coal to meet its demand for energy
Video: Origin of organelles Animation

For a complete list of videos, visit our video library