Theory as model building A firm's supply depends on the prices of the good and of the materials used to make it: Qs = −6+0.8P - 2Pm (d) The price of materials is Pm = 7. Find the optimal quantities to produce if the price of the good is P = 50 and P = 60. Graph the supply curve. (e) Now the price of materials changes to Pm,1 = 12. Find the optimal quantities to produce if the price of the good is P = 50 and P = 60. Show the shift of the supply curve on a graph.

Theory as model building A firm's supply depends on the prices of the good and of the materials used to make it: Qs = −6+0.8P - 2Pm (d) The price of materials is Pm = 7. Find the optimal quantities to produce if the price of the good is P = 50 and P = 60. Graph the supply curve. (e) Now the price of materials changes to Pm,1 = 12. Find the optimal quantities to produce if the price of the good is P = 50 and P = 60. Show the shift of the supply curve on a graph.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter6: Elasticities

Section: Chapter Questions

Problem 12P

See similar textbooks

Similar questions

Vintage Camera T Temple MIS G is You have the following data for product X: sales revenue $14,000, allocated fixed costs $12,000, variable costs $20,000. You cannot increase the price of product X or improve the production process to increase profitability. What should you do about product X? O do nothing - unprofitable products are just one of the costs of doing business O keep the product both in the short term and in the long term O keep the product in the short term and drop it in the long term O drop the product both in the short term and in the long term O drop the product in the short term and keep it in the long term
The market for lemonade is currently in equilibrium and the cost of lemons rises (an input How will this affect the lemonade market Price will rise and sales will increase Price will rise and sales will fall Price will fall and sales will rise Price will fall and sales will fall
Analyze relationship btween law of demand and law of diminishing marginal cost? B)Draw a graph to illustrate between a decrease in quantity demanded and a decrease in demand for registration cards of rashid latif cricket academy haripur.give posible reason for each.
Problem The average of price of Guess bag is 45 KD, the average price of Louis Vuiton bag is 2500KD. Use the Supply and Demand to Analyze why the price of these two bags are different.
operating in this market. PRICE (Dollars per oven) 100 90 80 70 60 50 40 30 20 10 0 0 5 MC ATC Z AVC 10 15 20 25 30 35 40 QUANTITY (Thousands of ovens) Price (Dollars per oven) 25.00 70.00 100.00 Quantity (Ovens) 45 For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.) 50,000 50 (? Total Revenue Fixed Cost Variable Cost (Dollars) (Dollars) (Dollars) 1,600,000 1,600,000 1,600,000 Profit (Dollars) If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $1,600,000 per day. In other words, if it shuts down, the firm would suffer losses of…
vSuppose that supply and demand for a certain commodity are described by the supply curve, p=0.0001q+0.005 , and demand curve, p=-0.002q+62.00 . Determine the quantity of the commodity that will be produced and the selling price.
What happens to the supply curve when the there is advancement in technology
Whats the market equilibrium price and the graph?
DRAW THE LAW OF DEMAND CURVE. NOW SHOW WHAT HAPPENS WHEN THE PRODUCT PRICE GOES DOWN-
Hi, the question is Doug William, the owner of a corner store, estimates that the supply and demand for a specialized energy drinkcould be described by the following equationsD : q = −25p + 345, S : q = 50 p − 330 ,where p represents the price in dollars per case (each case contains 12 bottles), and q represents the number of cases sold each week. I want you to help me with how to... Set the problem in Excel, and use Goal Seek to confirm your answers in parts
Price $3 2 10,000 20,000 30,000 S D Quantity Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 10,000 units the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high. the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low. the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently low. producers should lower the price to $1 in order to sell the quantity demanded of 10,000.
PRICE (Yen per gram) 100 90 80 70 60 40 30 20 10 0 0 0 Demand + 20 40 60 80 100 120 140 160 180 200 QUANTITY (grams of uff per month) Graph Input Tool Demand for Uff Price of Uff (Yen per gram) to eat my uff this morning, but there wasn't any Quantity Demanded DEMAND SHIFTERS Average Income -(Yen per month) Price of Tulg (Yen per gram) Price of Snick (Yen per gram) Of Suppose that the price of a gram of uff decreased from 50 yen to 40 yen. This would cause a an increase in 50 100 100 20 50 Plug any value lower than the current number into the Average Income box. A decrease in average income causes a leftward the demand curve. the demand curve and therefore When the prices of tulg or snick change, there is a shift of the demand curve for uff. The directions of these changes imply that snick and uff are , and that tulg and uff are . For example, a Hermetian might say, "I went in my fridge. So instead of having uff for breakfast, I ate some