ZuoTi.Pro
Question

DEMAND & SUPPLY: Consider the market for bananas which is known to be perfectly competitive. The...

DEMAND & SUPPLY:

  1. Consider the market for bananas which is known to be perfectly competitive. The market is characterized by the following relationships:

QD = 10,000 – 140P

QS = 7500 + 125P

  1. Plot the demand curve and the supply curve on a graph. Clearly label the axes and the intercepts.
  2. Why is the demand-curve downward-sloping? What is the slope of the demand curve?
  3. Why is the supply-curve upward-sloping? What is the slope of the supply curve?
  4. What is the equilibrium market price, the equilibrium quantity demanded, and the equilibrium quantity supplied?
  5. What is the price elasticity of demand and the price elasticity of supply at equilibrium?
  6. What is the price elasticity of demand at the y-intercept and the x-intercept?
  7. What is the value of consumer surplus for this market?
  8. What is the value of producer surplus for this market?
business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

140P Jop00- S 500+125P go 125-6-4500 TA :00 80-60 o D00 as P demanded falls d&s loooo-Hop> 억500 +125 p a500 865 p 265 265.answering only first four parts as per HomeworkLib policy

0 0
Add a comment
Know the answer?
Add Answer to:
DEMAND & SUPPLY: Consider the market for bananas which is known to be perfectly competitive. The...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • This problem involves solving demand and supply equations todetermine equilibrium Price and Quantity and then...

    This problem involves solving demand and supply equations to determine equilibrium Price and Quantity and then illustrating them graphically.Consider a demand curve of the form : QD= -3P + 45 where QD is the quantity demanded and P is the price of the good.The supply curve for the same good is: QS= P-5 where QS is the quantity supplied at price, P. Solve for equilibrium Price (P*) and Quantity (Q*). Please set up the problem and underline your answers below....

  • Consider a perfectly competitive market where Demand is described as Qd 100-2P. a. If the market...

    Consider a perfectly competitive market where Demand is described as Qd 100-2P. a. If the market price is 10, how many units are consumed in the market? What is the consumer surplus in the market? b. Suppose the market Supply is described as Qs 10 P. What is the equilibrium price in the market? Quantity? C. Suppose the market Supply is described as Qs 10+ P. What is the excess quantity supplied in the market at P demanded in the...

  • The wheat market is perfectly competitive, and the market supply and demand curves are given by the following equations:

    The wheat market is perfectly competitive, and the market supply and demand curves are given by the following equations: QD = 20,000,000 - 4,000,000P QS = 7,000,000 + 2,500,000P, where QD and QS are quantity demanded and quantity supplied measured in bushels, and P = price per bushel. a. Determine consumer surplus at the equilibrium price and quantity. b. Assume that the government has imposed a price floor at $2.25 per bushel and agrees to buy any resulting excess supply. How many bushels of wheat...

  • A perfectly competitive market is characterized by supply and demand as: Qd = 200 – 2Pd  Qs...

    A perfectly competitive market is characterized by supply and demand as: Qd = 200 – 2Pd  Qs = ( −10 + 5Ps), when Ps ≥ 2 Qs=0, when Ps < 2 a. What is the equilibrium price and quantity in this market if there is no tax? b. Suppose the government imposes a tax of $7 on this market. What is the new market quantity? What happens to the price paid by buyers (Pd ) and received by sellers (Ps )?...

  • For Questions 1-15, consider a competitive market for a good where the demand curve is determined...

    For Questions 1-15, consider a competitive market for a good where the demand curve is determined by: the demand function: P = 5+-1*Qd and the supply curve is determined by the supply function: P = 0.5*Qs. Where P stands for Price, QD is quantity demanded and QS is quantity supplied. What is the quantity demanded of the good when the price level is P = $4? QUESTION 2 What is the quantity supplied of the good when the price level...

  • 6. Demand, Supply, consumer surplus and Market Equilibrium. The following relations describe monthly demand and supply...

    6. Demand, Supply, consumer surplus and Market Equilibrium. The following relations describe monthly demand and supply conditions in the metropolitan area for recyclable aluminum QD = 317,500 - 10,000P (Demand) Qs = -2,500 + 10,000P (Supply) where Q is quantity measured in pounds of scrap aluminum and P is price in dollars. Complete the following table: A Calculate the market equilibrium price and output? B. What is the inverse demand curve P = f(QD)? C. Compute the consumer surplus at...

  • For Question 1-8, consider a competitive market for a good where the demand curve is determined...

    For Question 1-8, consider a competitive market for a good where the demand curve is determined by the demand function: P=5-QD and the supply curve is determined by the supply function: P=QS. Where P stands for Price, QD is quantity demanded and QS is quantity supplied. What is the equilibrium price level for the good in the competitive market?

  • Demand, Supply and Equilibrium: Given the following equations representing the behavior of producers and consumers:...

    Demand, Supply and Equilibrium: Given the following equations representing the behavior of producers and consumers: Price Quantity Demanded Qd Quantity Supplied Qs 52 48 44 40 35 32 29 26                     24                                                                                                         Consumers: Qd = 3,380 - 35P, Producers: Qs =95P, (P: Price) (Qd: quantity demanded, Qs: Quantity supplied ) What price corresponds to the equilibrium price for this market? (1%) What is the equilibrium quantity?    Over what range of prices does a Surplus result? Over what range of...

  • Consider a market for wheat. Suppose the supply and demand curves are linear, namely Supply: Qs...

    Consider a market for wheat. Suppose the supply and demand curves are linear, namely Supply: Qs = 120 + 240P Demand: Qd = 300 - 120P a) (5%) What is the equilibrium price and quantity? b) (5%) What is the price elasticity of demand at the equilibrium? What is the price elasticity of supply at the equilibrium? For part c and d below, suppose that a drought changed the supply curve and the new equilibrium price is $1.00 per bushel....

  • Labour Markets: Consider a hypothetical market for low-skilled labour. For simplicity, assume the short-run supply of...

    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....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT