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 27 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
Gracias!

duy1981999

  • Member
  • Posts: 341
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

A headache when you wake up in the morning is indicative of sinusitis. Other symptoms of sinusitis can include fever, weakness, tiredness, a cough that may be more severe at night, and a runny nose or nasal congestion.

Did you know?

Medication errors are three times higher among children and infants than with adults.

Did you know?

Excessive alcohol use costs the country approximately $235 billion every year.

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Did you know?

Glaucoma is a leading cause of blindness. As of yet, there is no cure. Everyone is at risk, and there may be no warning signs. It is six to eight times more common in African Americans than in whites. The best and most effective way to detect glaucoma is to receive a dilated eye examination.

Structure and function of the Na+/K+ pump. Structure and function of the Na+/K+ pump.
Female reproductive structure and function in humans. Female reproductive structure and function in humans.
Proximal tubule function Proximal tubule function
Testing motor function of cranial nerve VII - Close both eyes Testing motor function of cranial nerve VII - Close both eyes
Differentiation of Inverse Trigonometric Function Differentiation of Inverse Trigonometric Function
The net price of an article is $79.84. What is the list price if a discount of 23% was allowed? The net price of an article is $79.84. What is the list price if a discount of 23% was allowed?
Video: DNA Replication Factory and Protein

For a complete list of videos, visit our video library