Question

Question: Suppose you have been hired by a research firm trying to understand the market for...

Question: Suppose you have been hired by a research firm trying to understand the market for Widgets (a hypothetical product). Your analysis of the data indicates that the Demand curve for Widgets is estimated to be linear and given by equation Qd = 100 – P and the Supply curve for Widgets appears to be linear as well and is estimated as Qs = 3P – 20. Graphically draw these two curves, labeling all relevant points (such as intercepts for each line) on the horizontal and vertical axes.

- a) Given that Demand is Qd = 100 –P and Supply is Qs = 3P – 20, your next assignment is to compute the equilibrium Price and Quantity in the market for Widgets. Indicate these values on the graph.

- b) The firm that hired you has estimated that improvements in Widget quality tastes will cause the Demand curve to change to Qd = 140 –P.   If the Supply curve remains the same (Qs = 3P – 20), graphically draw these two curves, labeling all relevant points on the horizontal and vertical axes.

- c) Given that New Demand is Qd = 140 – P and Supply is Qs = 3P – 20, your next assignment is to compute the new equilibrium Price and Quantity in the market for Widgets. Indicate these values on the graph.

Homework Answers

Answer #1

Answer: All the part and graphs are attached below

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Show the work: Suppose the market demand and supply curves are given by Qd = 20...
Show the work: Suppose the market demand and supply curves are given by Qd = 20 – 3P and Qs = P, respectively. Suppose the government imposes a price ceiling of $2: Calculate the magnitude of the resulting shortage. Calculate the resulting full economic price. That is, the maximum price consumers are willing to pay to avoid waiting in line.
ndogenous, exogenous variables; Slope of a line - Equilibrium in the market-place means that quantity supplied...
ndogenous, exogenous variables; Slope of a line - Equilibrium in the market-place means that quantity supplied (Qs) equals quantity demanded (Qd). Consider the following market where quantity demanded and quantity supplied are res given respectively: QS = -8 + 4P and Qd = 42–6P. It follows that the equilibrium price ( Pe) = _________. In the context of the supply and demand model, the two variables (Qd and Qs) are referred to as ____________ variables (endogenous; exogenous). Explain your answer....
Consider the market for hiking boots. This market can be represented by the following supply and...
Consider the market for hiking boots. This market can be represented by the following supply and demand equations: Q=100–2P (demand) and Q= –20 +P (supply) a. Graph the supply and demand curves, labeling the axes clearly. Calculate the equilibrium price and quantity in this market (Q represents a pair of boots), and label these points on the graph. b. Calculate consumer surplus, producer surplus, and net benefits in the market for hiking boots.
The domestic market supply function is QS = 25 + 5P, and the domestic market demand...
The domestic market supply function is QS = 25 + 5P, and the domestic market demand function is      QD = 200 − 5P. The world price is 20. a) Carefully draw the graph for this market. (Label the axes and curves.) b) Is this country importing or exporting the commodity? Calculate how much. ______________ c) Calculate the consumer surplus _________ and producer surplus ________ for this country. Just need Part B and C. Thank you!
Suppose the market for corn is given by the following equations for supply and demand:            ...
Suppose the market for corn is given by the following equations for supply and demand:             QS = 2p − 2             QD = 13 − p where Q is the quantity in millions of bushels per year and p is the price. Calculate the equilibrium price and quantity. Sketch the supply and demand curves on a graph indicating the equilibrium quantity and price. Calculate the price-elasticity of demand and supply at the equilibrium price/quantity. The government judges the market...
Given the demand and supply for water dispensers: Qd = 720 - 17 P Qs =...
Given the demand and supply for water dispensers: Qd = 720 - 17 P Qs = -70 + 20 P 1. The market equilibrium price is   2. The market equilibrium quantity is   3. What is the value of the demand curve's vertical intercept ?    4. What is the value of the supply curve's vertical intercept?   5. What is the Consumer's Surplus?    6. What is the Producer's Surplus?    Submit Assignment
Suppose in Diamond Land people mine diamonds, and you have a demand and supply curve for...
Suppose in Diamond Land people mine diamonds, and you have a demand and supply curve for diamonds, where P is the price of diamonds and Q is the quantity demanded for diamonds (in pounds): P=300-0.5Q P=100+0.5Q Please find the equilibrium price and quantity for diamonds. Please graph supply and demand curves and show the equilibrium price and quantity demanded on the graph. Please also label the axes, intercepts, and curves. Suppose the government of Diamond Land wants to implement price...
Suppose the market for bottled water is competitive and is characterized by the following demand and...
Suppose the market for bottled water is competitive and is characterized by the following demand and supply conditions. The inverse demand and supply curves are depicted below. Demand: QD = 400 – 100 P Supply:    QS = 280 + 20 P (for P > 0) Price: Quantity: Consumer surplus: Producer surplus: Suppose in anticipation of an approaching hurricane, demand rises to QD = 800 – 100 P. What will happen in the market, including welfare effects, as measured by consumer...
A risk-neutral, price-taking firm must set output before it knows the market price. There is a...
A risk-neutral, price-taking firm must set output before it knows the market price. There is a 50 percent chance the market demand curve will be Qd = 10 – 2P and a 50 percent chance it will be Qd = 20 – 2P. The market supply curve is estimated to be QS = 2 + 2P. a. Calculate the expected (mean) market price. b. Calculate the variance of the market price. c. If the firm's marginal cost is given by...
A market is described by the following supply and demand curves: QS = 2P QD =...
A market is described by the following supply and demand curves: QS = 2P QD = 400 - 3P Solve for the equilibrium price and quantity. If the government imposes a price ceiling of $70, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and size of the shortage or surplus? If the government imposes a price floor of $70, does a shortage or surplus (or neither) develop? What are the price, quantity...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT