Consider two markets: the market for motorcycles and the market for pancakes. The initial equilibrium for both markets is the same, P = $1.50 and Q = 25 units. When the price is $6.75, the quantity supplied of motorcycles is 67 units and the quantity supplied of pancakes is 107 units. For simplicity of analysis, the demand for both goods is the same. What is the elasticity of supply for pancakes? Please round to two decimal places.
Consider two markets: the market for motorcycles and the market for pancakes. The initial equilibrium for...
Consider two markets: the market for motorcycles and the market for pancakes. The initial equilibrium for both markets is the same, the equilibrium price is $4.50, and the equilibrium quantity is 25.0. When the price is $6.75, the quantity supplied of motorcycles is 71.0 and the quantity supplied of pancakes is 105.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for pancakes. Please round to two decimal...
Consider two markets: the market for cat food and the market for dog food. The initial equilibrium for both markets is the same, the equilibrium price is $1.50 , and the equilibrium quantity is 29.0 . When the price is $7.75 , the quantity supplied of cat food is 75.0 and the quantity supplied of dog food is 107.0 . For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of...
Consider two markets: the market for cat food and the market for dog food. The initial equilibrium for both markets is the same, the equilibrium price is $6.50, and the equilibrium quantity is 21.0. When the price is $8.75, the quantity supplied of cat food is 61.0 and the quantity supplied of dog food is 107.0. For simplicity of analysis, the demand for both goods is the same Using the midpoint formula, calculate the elasticity of supply for dog food....
Labour Markets: Consider a hypothetical market for low-skilled labour. For simplicity, assume the short-run supply of workers is given by the equation Qs = 100 + 10w, where Qs is the quantity supplied and w is the wage. The demand curve is given by Qd = 250 − 5w, whereQd is the quantity demanded. Provide some intuition as to why the elasticities are inelastic. Supposethegovernmentweretoimplementaminimumwage(apricefloor)thatincreased the wage by 50%. Using your calculated elasticities, determine the response of workers and firms....
Scenario: Suppose the demand schedule in a market can be represented by the equation Q -500-10P, where is the quantity demanded and P is the price. Also, suppose the supply schedule can be represented by the equation Q* - 200+ 10P, where is the quantity supplied. Refer to Scenario: What is the elasticity of demand at the equilibrium and which one is more elastic, supply or demand at the equilibrium)? O a elasticity of demand is 3/7 and both demand...
4. Shifting curves and the importance of elasticity Consider the market for umbrellas. Suppose the quantity of umbrellas demanded by consumers (D) depends on the price of an umbrella (P) and the percentage chance of rain (R) forecasted by the local news station. Similarly, the quantity of umbrellas supplied by producers (Qs) depends on the price of an umbrella (P) and the square-foot price of waterproof nylon (N) used in the production of umbrellas. The following two graphs depict the...
4. Consider two markets, A and B, that have different price elasticities of demand and supply. Market A has price elastic demand and supply functions. Market B has very price inelastic demand and supply functions. a. Graph demand and supply curves for these two markets and describe how the curves differ across the 2 markets. b. Suppose both markets are subject to shocks that shift demand or supply from week to week. Further suppose that the shocks are similar (in...
Consider the market for snow shovels. Suppose the quantity of snow shovels demanded by consumers (QD) depends on the price of a snow shovel P) and the percentage chance of snow (S) forecasted by the local news station. Similarly, the quantity of snow shovels supplied by producers (Qs) depends on the price of a snow shovel (P) and the linear-foot price of a wooden rod (W) used in the production of snow shovels. The following two graphs depict the market...
Supply & Demand, Equilibrium, and Surplus 1. Consider a specific market for smart phone plans (not the phones) in a small town. Here are the conditions: Q = 50 – 0.5 * P Q = –25 + P a. Is the first one the supply or demand curve? How can you tell? (hint: solve for P first) b. At what price will the market be in equilibrium? How many transactions (quantity) will take place? c. If the current price is...
Initial Market Information: -Equilibrium Price: $1,000 -Equilibrium Quantity: 500 pairs of shoes Directions: A) Draw and graph the initial market information provided in a supply and demand framework on the following grapp Immediately after the shift, and at the initial equilibrium price ($1,000) quantity demanded (QD) is 1,000 pairs of shoes on the new demand curve (D1) -Some time after the shift the forces of supply and demand equilibrate the market at a price of $1,500 and a quantity of...