Suppose that an estimated monthly
supply functions for avocados in the U.S. is given by:
Q = 100 + 20 p - 40 pr
where
Qs is the quantity of avocados supplied in tons per year;
p is the price of avocados in US dollars per kilogram;
Pf is the price of fertilizer (an input) in dollars.
And suppose further that
Pf is $0.25 per kllogram.
Answer the following questions.
a) Draw the supply curve for avocados. You should be very precise and accurate in your draw-
ing especially when showing the price and quantity intercept values on the diagram.
b) Calculate the responsiveness of a change in the quantities supplied to a unit change in the
price (i.e., show how the quantities supplied would change if the price changes by a unit).Ex-
plain your answer.
c) Calculate the slope of the supply curve. What does it tell us regarding the relationship
between the price of avocados and the quantities supplied. Explain your result.
d) How would the supply curve shift if the price of fertilizer rises from $0.25 to $0.50 per
kilogram Show the change on a new diagram.
We need at least 10 more requests to produce the answer.
0 / 10 have requested this problem solution
The more requests, the faster the answer.
Q=58+15p-20pf Where pf is the price of fertilizer. Holding the price of fertilizer constant, by how much would the price of avocados need to rise to cause an increase of 75 (million lbs. per month) in the quantity of avocados supplied? To increase the quantity of avocados by 75 million lbs. per month, the price of avocados would need to change by $??. (Enter your response rounded to two decimal places.) Text Question 2.3 Question Help Suppose the supply function...
The estimated supply function for avocados is Q = 58 + 15p - 20pf, where p is the price of avocados and pf is the price of fertilizer. When the price of fertilizer increases by $1.50 the inverse supply curve shifts The price elasticity of supply, estimated at p = 4 and pf = 10, is approximately When the price of fertilizer increases by $1.50 the supply curve shifts
h) If the price of tomatoes increase how would you explain the change in demand for avocados with substitution and income effects? Explain in detail. 1) What is income elasticity of demand for avocado at the market clearing equilibrium price and quantity in Brooklyn avocado market? Explain. Also, based on your results explain what type of good tomatoes must be in Brooklyn. 1) Explain why as the price of avocado increases the demand for avocados becomes relatively more elastic? Also...
How to get the bottom 2 questions Suppose the demand function for avocados is -104-40p+20pt 0.01Y where p is the price of avocados, pt is the price of tomatoes, and Y is average income, and the supply function for avocados is Q-58 15p-20p, where pr is the price of fertilizer. Suppose pt SO.80, Y -$4,000, and pr $0.40. What is the equilibrium price and quantity of avocados? The equilibrium price of avocados is -$2 and the equilibrium quantity is Q80...
6) Price Ceiling: Assume that the government creates price controls for soybeans in order to help the poor. Assume that these price controls take the form of a price ceiling in which the government prohibits the price of soybeans from rising above $5.00 per kilogram. Draw a diagram. What will be the quantity of soybeans supplied? What will be the quantity of soybeans demanded? What will be the result of this price ceiling? In what quantity? CULULLLLS 2013 Macroeconomics Homework...
2. Consider again the avocado example, where demand and supply functions are Qd 160 40p Qs-50+15p Suppose a severe drought hit California, and the state government decided to subsidize farmers 40 cents for each pound of avocados produced. (Unit: Q is million pounds of avocados, and p is dollars). (1) With government subsidy, write down the functions of demand and supply. (2) What is the new equilibrium price and quantity of avocados? (Rounding to two decimal places) (3) Plot the...
The estimated monthly U.S. demand function for avocados is Q=144-40p+20pt, where p is the price of avocados and pt is the price of tomatoes. The estimated supply function is Q=50+15p.The initial price of tomatoes is $0.80 per pound. Using algebra, determine the initial equilibrium price and quantity of avocados, and then determine how price and quantity change if the price of tomatoes increases by $1.15 to $1.95. Given pt=$0.80, the initial equilibrium price of avocados is p=$?? and the initial...
5. Suppose the demand and supply functions are given by QD 15-P Qs- P-5, where QD and Qs are the quantities and P is the price. a) Graph the demand curve and supply curve. [Hint: label each axis, the price and quantity b) Calculate the equilibrium price and quantity; add these values to the graph and label them as c) Suppose demand decreases by 1 unit at each price. What is the new demand function? Add the d) Calculate the...
Suppose the market supply and demand for a good is given by QP = 390 - 30P, and QS = 20P - 10, where Pis the price measured in dollars, QS is the quantity supplied, and QP is the quantity demanded. The government imposes a per-unit tax of $2. By how much will the quantity sold change because of the tax? What is the per-unit burden of tax on buyers? What is the per-unit burden of tax on sellers?
1. The market for a product is defined by the following demand and supply curves: Qd=20-7p Qs=-4+5P where Qd and Qs are the quantities demanded and supplied, and P is the price of the product in £s. (i) Draw (accurately) a diagram to depict the market for this product and determine the equilibrium price and quantity. (ii) Solve for the equilibrium market price and quantity mathematically (remember that, in equilibrium, Qd=Qs).