Question

a. Suppose the price of a complementary product were to increase causing the demand to change by 30. Show the new demand in column 4 in the table above ь. The new equabrum price is $ and quantity is c Suppose that instead the average income were to increase (and probiotic yoghurt is a normal product change by 15. Show the new demand in column 5 in the table above

Answer 1

1	2	3	4	5	6
Price	Quantity demanded(1)	Quantity supplied(1)	Quantity demanded(2)	Quantity demanded(3)	Quantity supplied(2)
1.00	120	60	90	135	105
1.25	115	70	85	130	115
1.50	110	80	80	125	125
1.75	105	90	75	120	135
2.00	100	100	70	115	145
2.25	95	110	65	110	155
2.50	90	120	60	105	165

Equilibrium is attained where quantity demanded = quantity supplied

a). Column 4

b). Equilibrium is attained at the quantity of 80 cartons and price of $1.50.

Here we compare column 3(which shows demand) with column 4(which shows the supply)

c). Column 5

d). Equilibrium is attained at the quantity of 110 cartons and price of $2.25

Here we compare column 3(which shows demand) with column 5(which shows the supply)

e). Column 6

f). Equilibrium is attained at the quantity of 115 cartons and price of $1.25

Here we compare column 2(which shows demand) with column 6(which shows the supply)