This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose that the demand for oranges increases. Carefully explain how the rationing function of price ... (Read 28 times)

plus1

  • Hero Member
  • *****
  • Posts: 676
on: Jul 1, 2018
Suppose that the demand for oranges increases. Carefully explain how the rationing function of price will restore market equilibrium.
 
  What will be an ideal response?

Question 2

If two identifiable markets differ with respect to their price elasticity of demand and resale is impossible, a firm with market power will
 
  A) set a higher price in the market that is more price elastic.
  B) set a lower price in the market that is more price elastic.
  C) set price so as to equate the elasticity of demand across markets.
  D) set price equal to marginal cost in both markets.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

uniquea123

  • Sr. Member
  • ****
  • Posts: 311
Reply #1 on: Jul 1, 2018
Answer to Question 1

The increase in demand causes a shortage at the original equilibrium price; the quantity supplied is less than the new quantity demanded at that price. The existence of the shortage will cause the price to rise. As price rises, the quantity supplied will increase and the quantity demanded will decrease (along the new demand curve) until equilibrium is reached at a higher price (and quantity).

Answer to Question 2

B


plus1

  • Member
  • Posts: 676
Reply 2 on: Jul 1, 2018
Great answer, keep it coming :)

billybob123

  • Member
  • Posts: 336
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

If you could remove all of your skin, it would weigh up to 5 pounds.

Did you know?

Pink eye is a term that refers to conjunctivitis, which is inflammation of the thin, clear membrane (conjunctiva) over the white part of the eye (sclera). It may be triggered by a virus, bacteria, or foreign body in the eye. Antibiotic eye drops alleviate bacterial conjunctivitis, and antihistamine allergy pills or eye drops help control allergic conjunctivitis symptoms.

Did you know?

The Food and Drug Administration has approved Risperdal, an adult antipsychotic drug, for the symptomatic treatment of irritability in children and adolescents with autism. The approval is the first for the use of a drug to treat behaviors associated with autism in children. These behaviors are included under the general heading of irritability and include aggression, deliberate self-injury, and temper tantrums.

Did you know?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

Did you know?

The tallest man ever known was Robert Wadlow, an American, who reached the height of 8 feet 11 inches. He died at age 26 years from an infection caused by the immense weight of his body (491 pounds) and the stress on his leg bones and muscles.

This modified model of Easton’s systems theory puts government decision makers as the source of pol This modified model of Easton’s systems theory puts government decision makers as the source of pol
A sidewheeler on the Mississippi. In 1856 Samuel Clemens became an apprentice to a steamboat pilot a A sidewheeler on the Mississippi. In 1856 Samuel Clemens became an apprentice to a steamboat pilot a
Sketch a graph of the inverse of each exponential function. Sketch a graph of the inverse of each exponential function.
Solve the following log function: Solve the following log function:
During a period of high power demand, the voltage output of the power company is reduced by ... During a period of high power demand, the voltage output of the power company is reduced by ...
Use Implicit Differentiation to solve this function Use Implicit Differentiation to solve this function
Video: Elementary kinetics

For a complete list of videos, visit our video library