ZuoTi.Pro
Question

Consider the demand for gas in the US. Suppose that due to reading news reports that...

  1. Consider the demand for gas in the US. Suppose that due to reading news reports that buyers expect the price of gas to rise. Please draw the demand curve for gas and the effect of this change.
  2. Consider the demand for iPhones. Suppose Apple decides to raise the price of its iPhones and as a result people decide to buy far fewer iPhones than before.

Please draw the demand curve for iPhones and the effect from this increase in price.

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

a). If the buyers expect the price of gas to increase in the future , they will increase the current consumption of gas to take advantage before the price increase. The demand will increase and the demand curve will shift to the rightwards, this is shown by the below graph.

The demand curve shifts from D to D1.

b). The demand curve shows the negative relationship between the price and the quantity demanded, if there is an increase in the price the quantity demanded will decrease and vice versa. The effect is shown in the below graph,

T

The initial price and quantity demanded are P and Q , if the company Apple increases the price of I phones to P1 the quantity demanded will decrease to Q1.

0 0
Add a comment
Know the answer?
Add Answer to:
Consider the demand for gas in the US. Suppose that due to reading news reports that...
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

  • You are watching a national news broadcast. It is reported that an early snowstorm is heading...

    You are watching a national news broadcast. It is reported that an early snowstorm is heading for North Carolina State and that it will likely destroy much of this year’s apple crop. Your roommate says, “If there are going to be fewer apples available, I’ll bet that apple prices will rise. We should buy enormous quantities of apples now and put them in storage. Later we will sell them and make huge profits.” If this information about the storm is...

  • Consider the demand for gas in the US. Suppose that people’s tastes and preferences move away...

    Consider the demand for gas in the US. Suppose that people’s tastes and preferences move away from cars and into bicycles and walking. What is the effect on the market for gas? Group of answer choices Price falls and quantity falls Price rises and quantity rises Price rises and quantity falls Price falls and quantity rises No effect

  • Please answer D Question 12 2.6 pts Consider the market for baseball bats below (and assume...

    Please answer D Question 12 2.6 pts Consider the market for baseball bats below (and assume it can be analyzed in our typical supply/demand framework) SPrice (P) Quantity (a) If the price of ash (the kind of wood used to make baseball bats) increases, the market equilibrium price of bats will increase and the equilibrium quantity will decrease. You should think about what this would look like on the graph above (i.e., with appropriate shift (or shifts). Suppose an analyst...

  • 1. Consid Homework 2 ECO 205 SHOW ALL OF YOUR WORK FOR CREDIT Due Wednesday February...

    1. Consid Homework 2 ECO 205 SHOW ALL OF YOUR WORK FOR CREDIT Due Wednesday February 19th 1. Consider the market for iPhones. Suppose apple builds in a feature that cause iPhone batteries to stop working after 18 months. The immediate effect is that people buy more iPhones. Holding all else equal, what happens to the market equilibrium, supply and demand curves, and for what reason does this change occur? Please state your answer in words and provide a graph...

  • 1. What effect could the following have on the demand for hamburgers? a. (0.2 pt) The...

    1. What effect could the following have on the demand for hamburgers? a. (0.2 pt) The price of hot dogs decreases b. (0.2 pt) The price of hamburgers increases. c. (0.2 pt) The price of hamburger buns decreases. d. The income of hamburger consumers increases. 1. (0.2 pt) If hamburgers are a normal good. 2. (0.2 pt) If hamburgers are an inferior good 2. Consider the market for minivans in Naperville, Illinois. For each of the events listed below identify...

  • The 9/11 terrorist attacks caused the us. arine travel demand curve to shift left by an...

    The 9/11 terrorist attacks caused the us. arine travel demand curve to shift left by an estimated 30% (no and Lee, 2005). Use a supply-and-demand diagram to show the likely effect on price and quantity (assuming that the market is competitive). Consider the market for airline travel lustrated in the figure to the right 1.) Using the line drawing tool, graph a new airline travel demand curve. Label this curve D2 2.) Using the point drawing tool, indicate the new...

  • 1. (15 pts) Suppose Amy enjoys apple juice (A) and grape juice (G) according to U(A,G)...

    1. (15 pts) Suppose Amy enjoys apple juice (A) and grape juice (G) according to U(A,G) = 3A+4G. (a) (4 pts) If apple juice costs 3 cents per ounce and grape juice costs 5 cents per ounce, and Amy has 30 cents to spend on these products, how much apple juice and grape juice should she buy to maximize her utility? (b) (3 pts) Draw the graph of her indifference map and her budget constraint, and show that the utility...

  • 7. Suppose the inverse demand equation for rental apartments is P = 2000 – Q and...

    7. Suppose the inverse demand equation for rental apartments is P = 2000 – Q and the inverse supply equation for rental apartments is P=Q. Suppose there's a policy that restricts the price (monthly rental) to not exceed $1200. Which of the following statement is correct? A. The market equilibrium price will be $1200. B. There will be no excess demand or excess supply. C. There will be an excess demand of 400 units. D. There will be an excess...

  • 1. Consider the market for AT&T Sim Cards in the U.S., suppose their demand and supply...

    1. Consider the market for AT&T Sim Cards in the U.S., suppose their demand and supply curves are given by the following equations: Q = 26,000 – 600P Q = 9,000 + 1,100P Where P is measured in dollars Q is the number of Sim Cards sold per year. a. Find the equilibrium price and quantity in this market? b. Draw the graph to show the equilibrium price and quantity c. Suppose the price is currently equal to $8 in...

  • In July 2018, vandals in Farmland poisoned ten million tomato seedlings by putting herbicide into the...

    In July 2018, vandals in Farmland poisoned ten million tomato seedlings by putting herbicide into the irrigation water. The seedlings were killed. These seedlings would have produced many of the tomatoes that were planned to be sold in Farmland in October 2018. For each of your answers below, identify the condition (determinant) of demand and/or supply and the impact on the equilibrium price and equilibrium quantity of the product. Using a demand and supply diagram, consider the effect of the...

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