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- There is a lot of discussion around market prices and economic rents – you are to investigate a product you are assigned and discuss price variability in the product e.g. are there differences in quality, demand, supply and/or price and think about why that might be the case and are there economic rents occurring? Product: BreadThe image attatchded shows a supply and demand curve for a product. (a) Find a price where the supply and demand curve would predict a surplus in the marketplace for the produce. Explain how you know there would be a surplus using using data from the supply and demand curve. (b) Estimate the price where the consumers would completely stop buying the product. Explain how you found your answers by referring to the above graph. (c) Estimate the price where the free market would eventually settle according to the supply and demand curve.Assume gasoline is sold in a competitive market, the equilibrium price is $50 per barrel, and the equilibrium quantity is 1000 barrels. (a) Using the numerical values above, draw a correctly labeled graph of the gasoline market and show each of the following. (i) The equilibrium price (ii) The equilibrium quantity (b) At a price of $40 per barrel, will there be a surplus or a shortage in the market? Explain. (c) Assume new oil wells are discovered. On your graph from part (a), show how this change will affect the equilibrium price and quantity in the market for gasoline. (d) Assume instead there is an increase in the price of gasoline-operated automobiles. How will this change affect the market for gasoline? Explain. (e) If both changes in part (c) and part (d) occurred simultaneously, what will happen to the equilibrium price and quantity of gasoline?
- The following table shows the demand and supply of tickets of a football game which will be held at Shah Alam Stadium. Unit Price (RM) Market Demand (units) Market Supply (units) 20 5000 3500 40 4000 3500 60 3000 3500 80 2000 3500 100 1000 3500 a) On your foolscap paper, draw the demand and supply curves. Label all axes, all curves and the equilibrium point. (6m) b) How much is the equilibrium price and equilibrium quantity? (2m) c) At which price will there be a surplus of 2500 tickets? (1m) d) What will happen when the market price is RM40? Show your answer on the same diagram. (3m) e) Why is the supply of tickets fixed at 3500? (1m)IV. APPLICATION 2. A recent typhoon hit the Philippines where most of the raw materials are produced. What non-price determinants will affect the supply and in what way? How will it affect the country’s economy?Situation: Lettuces and strawberries have almost doubled in price, and the produce rep says this will likely be the case for a few months until the market can recover. What are you likely to see over the next one to two months as far as food cost?
- The green grass in the lawn covered with coconut shell for one week turned yellowgreen in color. Why? How can the yellow green colored grass recover?5) A storage company owns 150 storage spaces that can be rented at $40 per month each. For each $7 month increase in rent there is one vacancy created that cannot be filled. What should the monthly rent be to maximize the total revenue?How would the equilibrium quantity and price of smartphones be altered if the prices of their electronic components increase, and labor costs to produce them rise, while alternative communication methods become more accessible and user-friendly? (A) Quantity will fall, and the effect on price is ambiguous. (B) Price will fall, and the effect on quantity is ambiguous. (C) Quantity will rise, and the effect on price is ambiguous. (D) Price will rise, and the effect on quantity is ambiguous.
- Subject: Engineering Economics List the "Ceteris Paripus" variables that affect demand and illustrate a shift in a Demand Curve. Now discuss how a change in each of these variables would lead to the shift you have illustrated in your drawing.Which of the following choices could cause the movement shown in the graph? $120 $90 $60 $30 $2 S1 100 200 300 400 500 Quantity of product M Supplied A. Product becomes more popular B. Tax increase C. Number of buyers increases D. Inputs become cheaper Price per Unit of Product MPrice (dollars par bar 3.00 2.50 2.00 1.50 1.00 0.50 0 5 10 15 Supply of energy bars (original) Supply of energy bars (new) Demand for energy bars 20 25 30 35 Quantity (millions of bars per week) Based upon the above graph, answer the following questions A) The shift in supply to the right represents a(n) in supply and new equilibrium quantity is B) Based upon your answer to A, name two factors that may have caused the change in supply? C) Would this occurrence result in a surplus or shortage of energy bars? Explain why