Question

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Q(5): Price Quantity Quantity (dollars per supplied demanded pound) (pounds) (pounds) 3 1 7 4 2 5 5 4 4 6 5 2 7 6 1 The above table shows the demand schedule and supply schedule for chocolate chip cookies. Use the Demand function and Supply function to find the equilibrium quantity and equilibrium price for chocolate chip cookies? Equilibrium quantity= 4 Equilibrium Price= 5 Q(6): Personal computers are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain, with using a graph, the effects of the technological innovations and their effect on the quantity of computers

Answer 1

Equit' bnum Quaunty = 4 Equilibrium price $5 AT Equilibrium condition Quantity demand = Quantity supplied & Qd = Qs Here in the table Qd = Qs = 4 at P = $5 6 Due to New technol the supply cunue will shifted fechnology Rightwand due to reduction in the input costs which resuts increase in Equilibrium Quannity and decreasing the price Price SI E = inihal Equilibrium E' final Equilibrium po E pl 0 Quently the supply Canne will shifted so to s' lear leading to decease in Price (p to fl) and inaeming Pr Quantity (Q" to Q')

a) P = $3 + 0,= 14 B wody Q2 =18 IP-P pico clashicity of demand = 102-4 a hth 2 18-14 Ghe 1-3 173 18+14 2 mo25 -025 Hence Price elasticity of demand for Billy Bob's ribs which is Inelastic in Nature 18 okkene @ Elastic - Price b/w $1.50 to 8 1-75 (6 unih Elastic - Brice b/w $1.25 to $1.50 © Inelantic - Price b/w $1 to $1.25 Because inelashe demand where Total Revenue and Price move in the SAME direction Clantic demand Where Total Revenue and price move on the opposite ofirection