market equilibrium. There is data on three different goods � bananas, chocolate, and bonds. Consider the market for bananas at a local produce store. The manager has data on how much consumers will demand and how much his distributors will supply at various prices.??What is the market clearing price and quantity? How did you arrive at that result? The Market for Bananas
Price Supply Demand
50 100 35
45 90 40
40 80 45
35 70 40
30 60 55
25 50 50
20 40 55
15 30 60
10 20 75
5 10 80
Now consider the market for three kinds of chocolate at a candy store. The manager has data on how much consumers will demand and how much his distributors will supply for three different market segments: Premium, Generic, and Every Day.??What is the market clearing price and quantity for each segment? How did you arrive at that result? Premium Chocolate Price Supply Demand
2 300 5
1.75 100 10
1.5 80 20
1.25 70 50
1 30 100
0.75 0 200
0.5 0 20,000
0.25 0 40,000
Generic/Store Chocolate
Price Supply Demand
2 100 0
1.75 90 0
1.5 50 0
1.25 40 0
1 30 5
0.75 20 10
0.5 10 100
0.25 0 10,000
Every Day Chocolate
Price Supply Demand
2 200 0
1.75 70 0
1.5 30 0
1.25 20 0
1 10 0
0.75 0 100
0.5 0 1,000
0.25 0 20,000
A state government is issuing tax-free bonds to finance the building of a new bridge. The government will issue 10,000 bonds at an auction. The government will take the highest bid, the next highest, and so on until all the bonds are sold. Every winner pays the lowest price. ??What is the market clearing price and quantity? How did you arrive at that result?
Price Supply Demand
101 10,000 100
100.5 10,000 500
100 10,000 4,500
99.5 10,000 4,900
99 10,000 6,100
98.5 10,000 10,000
Thanks.
Maria
market equilibrium. There is data on three different goods � bananas, chocolate, and bonds. Consider the market for bananas at a local produce store. The manager has data on how much consumers will demand and how much his distributors will supply at various prices.??What is the market clearing price and quantity? How did you arrive at that result? The Market for Bananas
Price Supply Demand
50 100 35
45 90 40
40 80 45
35 70 40
30 60 55
25 50 50
20 40 55
15 30 60
10 20 75
5 10 80
Now consider the market for three kinds of chocolate at a candy store. The manager has data on how much consumers will demand and how much his distributors will supply for three different market segments: Premium, Generic, and Every Day.??What is the market clearing price and quantity for each segment? How did you arrive at that result? Premium Chocolate Price Supply Demand
2 300 5
1.75 100 10
1.5 80 20
1.25 70 50
1 30 100
0.75 0 200
0.5 0 20,000
0.25 0 40,000
Generic/Store Chocolate
Price Supply Demand
2 100 0
1.75 90 0
1.5 50 0
1.25 40 0
1 30 5
0.75 20 10
0.5 10 100
0.25 0 10,000
Every Day Chocolate
Price Supply Demand
2 200 0
1.75 70 0
1.5 30 0
1.25 20 0
1 10 0
0.75 0 100
0.5 0 1,000
0.25 0 20,000
A state government is issuing tax-free bonds to finance the building of a new bridge. The government will issue 10,000 bonds at an auction. The government will take the highest bid, the next highest, and so on until all the bonds are sold. Every winner pays the lowest price. ??What is the market clearing price and quantity? How did you arrive at that result?
Price Supply Demand
101 10,000 100
100.5 10,000 500
100 10,000 4,500
99.5 10,000 4,900
99 10,000 6,100
98.5 10,000 10,000
Thanks.
Maria
Related textbook solutions
Related questions
Assume the following information for the demand and supply curves for good Z.
| Price (in $) | Demand (in units) | Supply (in units) |
| 1 | 100 | 10 |
| 2 | 90 | 15 |
| 3 | 80 | 20 |
| 4 | 70 | 25 |
| 5 | 60 | 30 |
| 6 | 50 | 35 |
| 7 | 40 | 40 |
| 8 | 30 | 45 |
| 9 | 20 | 50 |
| 10 | 10 | 55 |
1. Draw the corresponding supply and demand curves.
2. What are the equilibrium price and quantity traded?
3. Would a price of $9 result in a shortage or a surplus? How large?
4. Would a price of $3 result in a shortage or a surplus? How large?
5. If the demand for Z increases by 15 units at every price, what would be the new equilibrium price and quantity traded be?
6. Given the original demand for Z, if the supply of Z were increased by 15 units at every price, what would be the new equilibrium price and quantity traded be?
Assignment 1 (10 points)
Willy's Widget, a monopoly, faces the following demand schedule (sales in widgets per month):
|
Price |
Quantity |
|
|
80 |
10 |
|
|
75 |
20 |
|
|
70 |
30 |
|
|
65 |
40 |
|
|
60 |
50 |
|
|
55 |
60 |
|
|
50 |
70 |
|
|
45 |
80 |
|
|
40 |
90 |
|
|
35 |
100 |
|
|
30 |
110 |
|
|
25 |
120 |
|
|
20 |
130 |
Calculate marginal revenue over each interval in the schedule. If marginal cost is constant at $38 and the fixed cost is $400, what is the profit-maximizing level of output? What is the level of profit? Explain your answer using marginal cost and marginal revenue.
Repeat the exercise for MC = $18
Assignment 2 (10 points)
The following diagram shows the cost structure of a monopoly firm as well as market demand. Identify on the graph and calculate the following:
Profit maximizing output level
Profit maximizing price
Total revenue
Total cost
Total profit or loss
