« previous next »

Author Question: It is appropriate to use the supply-and demand-model if, in a market, A) everyone is a price ... (Read 72 times)

dmcintosh

  • Hero Member
  • *****
  • Posts: 517
on: Jul 1, 2018
It is appropriate to use the supply-and demand-model if, in a market,
 
  A) everyone is a price taker with full information about the price and quality of the good.
  B) firms sell identical products.
  C) costs of trading are low.
  D) All of the above.

Question 2

Suppose the market for a good is expressed as follows: Inverse demand: P = 200 - 2Q Inverse supply: P = 2Q What is the equilibrium if the government imposes a supply quota of 75 units? What is the equilibrium if the government imposes a supply quota of 25 units?
 
  What will be an ideal response?
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


mtmmmmmk

  • Sr. Member
  • ****
  • Posts: 335
Reply #1 on: Jul 1, 2018
Answer to Question 1

D

Answer to Question 2

The market equilibrium with no quota is P = 100 and Q = 50 units. A supply quota of 75 units is not binding so the equilibrium is unchanged. A supply quota of 25 units will change the supply curve. The new supply curve will be the same as the no quota supply curve until 25 units and then it will be vertical. The new equilibrium is P = 150 and Q = 25 units.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Asthma attacks and symptoms usually get started by specific triggers (such as viruses, allergies, gases, and air particles). You should talk to your doctor about these triggers and find ways to avoid or get rid of them.

Did you know?

Illness; diuretics; laxative abuse; hot weather; exercise; sweating; caffeine; alcoholic beverages; starvation diets; inadequate carbohydrate consumption; and diets high in protein, salt, or fiber can cause people to become dehydrated.

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

Fatal fungal infections may be able to resist newer antifungal drugs. Globally, fungal infections are often fatal due to the lack of access to multiple antifungals, which may be required to be utilized in combination. Single antifungals may not be enough to stop a fungal infection from causing the death of a patient.

A molecular model showing chromosome territories in the cell nucleus of humans A molecular model showing chromosome territories in the cell nucleus of humans
The Hepatic Portal Blood Supply The liver receives water, minerals, and nutrients from the digestive The Hepatic Portal Blood Supply The liver receives water, minerals, and nutrients from the digestive
Kaplan’s Three-Stage Model of Sexual Response Kaplan’s Three-Stage Model of Sexual Response
Who's Policing the Food Supply? Who's Policing the Food Supply?
A model of the splicing mechanism for removal of an intron from nuclear-derived pre-mRNA A model of the splicing mechanism for removal of an intron from nuclear-derived pre-mRNA
A Model of Directional Selection against a Recessive Lethal Allele A Model of Directional Selection against a Recessive Lethal Allele
Video: EpiPen Animation (Part 2)

For a complete list of videos, visit our video library