Reference no: EM13174514
John Barks owns Barks Computer Screens Inc. and wants to identify the supply and demand for screens in his market. The company can produce large screens called Wides or small screens called Squares. The production processes are interchangeable, and production can be adjusted depending on market conditions. The demand for both products is highly elastic in terms of price elasticity, and customers perceive the two products as close substitutes for each other.
Barks needs some help in completing his market analysis. Therefore, he hires you as a consultant and provides you with the results of his analysis. He has found that the functions for supply and demand in his market are:
Qd = - 1650 - 35P + 12.5Pw + 0.1Y
Qs = - 120 + 75P - 30Pw+ 13PL + 12R
Where:
Qd = Demand
Qs = Supply
Pw = Average price of Wides
Y = Income in his market
PL = Price of labor
R = Is the average humidity level measured in hums
Create a report answering the following questions:
Assume the quantities demanded and supplied are a function of price. Given the following conditions, determine the demand and supply curves for Barks Computer Screens Inc.
Pw = $6.00
Y = $1,600.00
PL = $9.00
R = 25
Calculate the market conditions (shortage, surplus, or equilibrium) for Wides if the following price conditions exist in the market: $1.75, $2.10, and $2.70.
Determine the market equilibrium conditions in this market for Wides.
Summarize your recommendations or advice to Barks concerning market conditions and production levels.
|
Explain equation of the demand curve
: Based on the demand curve for asparagus above, what is the relationship between asparagus and good Z? What is the equation of the demand curve for asparagus if the price of good Z is $20?
|
|
Explain sources of growth in the economy
: List at least four sources of growth in the economy along with two examples of each source. Explain what it contains and why these sources are important.
|
|
Rankof the countries according to gdp
: Rank the countries according to GDP per person in the most recent year for which you collected data. List the countries with the 10 highest levels of GDP per person. Has the composition of the 10 richest countries changed since 1970?
|
|
How does the consumption of the two goods change?
: How does your consumption of the two goods change? How does your response depend on income and substitution effects? Can you afford the bundle of soda and pizza you consumed before the price changes?
|
|
Determine the market conditions
: The production processes are interchangeable, and production can be adjusted depending on market conditions. The demand for both products is highly elastic in terms of price elasticity, and customers perceive the two products as close substitutes f..
|
|
Define average total cos
: profit = (quantity of output) x (price - average total cost), marginal revenue = (change in total revenue)/(quantity of output).
|
|
Define loss
: Suppose you bought a ticket to a football game for $30 and that you place a $35 value on seeing the game. If you lose the ticket, then what is the maximum price you should pay for another ticket?
|
|
Explain automatic stabilizer and spending multiplier
: The school of economic thought which argues that through tax reductions, and deregulation, government creates the proper incentives for the private sector to increase aggregate supply is known as the.
|
|
Define average and marginal revenue
: Which of the following statements is correct? Marginal revenue equals $3, Average revenue equals $600, Average revenue exceeds marginal revenue, but we don%u2019t know by how much.
|