The law of demand implies, holding everything else constant, that

A) as the price of bagels increases, the quantity of bagels demanded will decrease.
B) as the price of bagels increases, the quantity of bagels demanded will increase.

answer

watching

220

views

For unlimited access to Homework Help, a Homework+ subscription is required.

You have 0 free answers left.
Get unlimited access to 3.8 million step-by-step answers.

Get unlimited access

Already have an account? Log in

Samantha BalandoLv7

30 Sep 2020

Unlock all answers

Get 1 free homework help answer.

Already have an account? Log in

Related questions

Consider the following demand function and the supply schedule for bread:

Demand function: Q^d = -2P+20 and;

Supply schedule:

P	Qs
4	4
8	12

a. determine the supply function and solve the equations for the equilibrium values (show your work).

b. Show what happens if the authorities impose a price restriction at $8.00. What may be the justification for it?

c. Show graphically and explain what happens to the price and quantity at equilibrium if the price of bagels rises and while the cost of energy to bake the bread increases.

yellowminnow249

I. When the question requires a supply or demand graph, you are required to draw the graph(s) to answer the question. Do not forget to label your graphs completely and correctly.

II. If the question has multiple parts, like a, b, and c; you need to draw a graph for each part that requires one and separate your answers as a, b, and c.

III. When you draw graphs, you are also required to label them completely in order to earn full credit for your answers.

Separate your answers with their question number.

Question 1: Patrick owns a bagel business in Seattle and he wants to increase his total revenue. He knows that when bagels are $1.00, he sells 250 an hour, and when lowers the price to $0.75 he sells 275 an hour.

a. Using the midpoint formula and showing your work, calculate the price elasticity of demand for Patrick's bagels.

b. Using the price elasticity of demand for Patrick's bagels, explain whether he should raise or lower the price to generate more revenue.

c. Andrew's bakery moves in across the street from Patrick's shop. Explain what is likely to happen to the price elasticity of demand for Patrick's bagels.

Question 2: If we know that the price elasticity of demand is:

a. 5, graph the demand curve.

b. 0.5, graph the demand curve.

c. infinite, graph the demand curve

Question 3: A firm knows that the price elasticity of demand for its service is 0 (zero).

a. Graph this demand curve.

b. What should the firm do to the price of its good to raise total revenue?

Question 4: In a recession, there are many unemployed workers. Employers find that when the price of labor is $9.00, the quantity supplied is 200 workers. When they lower the wage to $8.50, 175 workers are willing to work.

a. Using the midpoint formula and showing your work, calculate the price elasticity for workers.

b. Over time, technology becomes more efficient as a substitute for workers. What happens to a firm's demand for workers? Explain.