Market Equilibrium) A successful advertising campaign by the California Milk Processor Board increases demand for milk. In the short-term, this moves the market demand curve to the right (i.e., increases demand at all price level). The new (short-term) market demand function becomes: Qd(P) = 10062 - 100P The advertising campaign does not affect the (short-term) market supply function which remains: Qs(P) = 3564 + 800P A. Calculate the new Equilibrium Price. B. Calculate the new Equilibrium Quantity.
Qd(P) = 10062 - 100P
The advertising campaign does not affect the (short-term) market supply function which remains:
Qs(P) = 3564 + 800P
A. Calculate the new
B. Calculate the new Equilibrium Quantity.
2. (Profit Maximization in a
TC(Q) = $1036.8 + $2Q + $0.0045Q^2
A. What is the new Profit Maximizing Output Level (Q*) for your farm?
B. Where are the farm's Weekly Profits at the new Profit Maximizing Output Level?
C. Is this market at its long-run equilibrium? If yes, explain why. If not, discuss what will need to happen to restore the market to its long-run equilibrium.
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