Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 8, Problem 8.1IP
To determine
The
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The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $30, $29, $20, $16, and $12. Five buyers are willing to buy one widget at the following prices: $10, $12, $20, $24, and $29. What is the equilibrium price and quantity?
The following table shows the supply and demand schedules in a market.
Price ($)
Quantity Demanded (units)
Quantity Supplied (units)
0
50
0
2
40
15
4
30
30
6
20
45
8
10
60
10
0
75
Suppose a new supplier joins the market and no matter what the price is he produces 25 units. What would be the new supply curve? What would be the new equilibrium price and quantity in the market?
Carefully explain what is happening in the following market. Indicate the impact if any on demand, supply, price and quality.
In the market for airline tickets, airline carriers have drastically cut fares for international air trave resulting in 3% increase in ticket sales. meanwhile, recent health considerations due to COVID-19 have caused an 11% reduction in the demand for international travel
Impact on supply
impact on price
impact on quantity
impact on demand
Chapter 8 Solutions
Managerial Economics: A Problem Solving Approach
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- The restaurant industry is highly competitive. The pandemic has likely reduced the demand for restaurant meals. It has also likely raised the fixed costs of a typical restaurant (because owners have needed to reconfigure seating and install new ventilation systems). a)What will these two developments do to the equilibrium price and quantity in the market for restaurant meals? b)What will these two developments do to the number of meals produced and the profits of a typical restaurant in the short run?arrow_forwardGiven the supply and demand schedules for calculators shown below, what is the market’s equilibrium price? Demand Schedule for Calculators Supply Schedule for Calculators Price ($) Quantity Price ($) Quantity 50 0 50 16 40 4 40 12 30 8 30 8 20 12 20 6 10 16 10 3 1 20 1 0arrow_forwardThe following diagram shows supply and demand in the market for smartphones. Use the black point (plus symbol) to indicate the equilibrium price and quantity of smartphones. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. (?) Demand 300 270 Equilibrium 240 210 180 Consumer Surplus 150 120 Producer Surplus 90 60 30 Supply 30 60 90 120 150 180 210 240 270 300 QUANTITY (Millions of phones) Total surplus in this market is $ million. PRICE (Dollars per phone)arrow_forward
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