ZuoTi.Pro
Question

Suppose that (i) Good x is an inferior good and income falls and simultaneously (ii) cost...

Suppose that (i) Good x is an inferior good and income falls and simultaneously (ii) cost of production of good x rises. Explain what happens to the equilibrium price and quantity as the above changes happen simultaneously. Support your result with graphs.

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

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
Suppose that (i) Good x is an inferior good and income falls and simultaneously (ii) cost...
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

  • Question 11 0.16 pts If the price and quantity for an inferior good, Good X, is...

    Question 11 0.16 pts If the price and quantity for an inferior good, Good X, is $8 and 6 units at the original equilibrium, what is one possibility for the new equilibrium of Good X if we see income increase and all other factors stay constant? O $6 and 8 units O $10 and 8 units $6 and 4 units O $10 and 2 units O $10 and 4 units Question 12 0.16 pts According to the law of demand,...

  • 1. If hot dogs are an inferior good, a decrease in income will cause the equilibrium...

    1. If hot dogs are an inferior good, a decrease in income will cause the equilibrium price of hot dogs to rise a. True b. Fals dicale the answer choice that hest cmnletes the statement or answers the question. 2. If the demand curve for a good shifts leftward. a quantity demanded is less at each price. b. quantity demanded remains constant at each price. c. quantity demanded is greater at each price. d. demand is greater at each price....

  • Suppose good A is an inferior good. Suppose good B is a normal good. Suppose good...

    Suppose good A is an inferior good. Suppose good B is a normal good. Suppose good A and good C are substitutes. Suppose good B and good D are complements. Question 5 If an income increases in an economy, how are the equilibrium price of good B and the equilibrium quantity of good B affected? A. The equilibrium price of good B goes up & The equilibrium quantity of good B goes up B. The equilibrium price of good B...

  • Suppose that the demand and supply functions for good X are Qd = 56 – 2PX...

    Suppose that the demand and supply functions for good X are Qd = 56 – 2PX + 0.01M +7PR Qs = -600 + 10PX Where PX is the sales price of good X, M is average consumer income, PR is the price of a related good. Is good X a normal or inferior good? Are good X and R complements of substitutes? Explain? Suppose M = $50,000 and PR = $20 What is the direct demand function for good X?...

  • ​​A good is considered normal when its income elasticity of demand is  ___ and inferior when the...

    ​​A good is considered normal when its income elasticity of demand is  ___ and inferior when the its income elasticity of demand is ___. ​Greater than zero, less than zero. ​Less than zero, greater than zero. ​Greater than one, less than one. ​Less than one, greater than one. If an increase in prices decreases total revenue in the short run, what will it do to total revenue in the long run? ​It will decrease total revenue in the long run. ​It...

  • Suppose the market for coffee is in equilibrium. Explain (using graphs) what would happen to the...

    Suppose the market for coffee is in equilibrium. Explain (using graphs) what would happen to the equilibrium price and equilibrium quantity of coffee in each of the following scenarios. Please place your final equilibrium effects on price and quantity in the SNoodle box below (Ge,just say Equilibrium price increase/decreased etc and equilibrium quantity increased/decreased etc.). Be sure to put your graphical analysis on your scratch paper to be turned in. Credit will be given not only for the correct answers,...

  • For a certain good A, if the price falls from 6 to 4, the quantity demanded...

    For a certain good A, if the price falls from 6 to 4, the quantity demanded rises from 8000 to 12000. (i) Calculate the price elasticity of demand by using midpoints. Explain the meaning of the value of the elasticity found. (ii) What happens to turnover (Price * Quantity) as a consequence of the price change?

  • Suppose that goods X and Y are substitutes and the price of good Y falls. We...

    Suppose that goods X and Y are substitutes and the price of good Y falls. We would then expect the quantity of good Y demanded to increase and the demand for good X to increase also. an increase in the demand for good X and a decrease in the quantity of good Y demanded. an increase in the demand for both good X and good Y. an increase in the quantity demanded of good Y and a decrease in the...

  • Qp-8000-2Px+0.41-2Py+5Pz Where OD quantity demanded of good X Px price of good X Iconsumer income, in...

    Qp-8000-2Px+0.41-2Py+5Pz Where OD quantity demanded of good X Px price of good X Iconsumer income, in thousands Py price of good Y Pz price of good Z a. Based on the demand curve above, is X a normal or an inferior good? b. Based on the demand curve above, what is the relationahip between good X and good Y? c. Based on the demand ourve above, what is the relationship between good X and good Z7 d. What is the...

  • 1.Suppose that good ABC is a neutral good for Leah. If Leah's income rises, then the...

    1.Suppose that good ABC is a neutral good for Leah. If Leah's income rises, then the result will be that Leah's demand curve for good ABC will a.shift rightward. b.shift leftward. c.not shift at all. d.shift rightward immediately and then shift leftward. ( I chose option A) 2. Which of the following illustrates the law of supply? a.Company ABC increases the quantity supplied of its product as the price of that product rises. b.Company ABC decreases the quantity supplied of...

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