Practice calculations and problem-solving methods

¶ … change: for question 4e, find the new equilibrium P. And Q, but you do NOT need to answer the questions - What is the effect on supply?

0=3000-10p

p=300

0=-1000+10p

1000=10p

p=1000

3000-10p=-1000+10p

4000=20p

p=200

3500-10p=-1000+10p

4500=20p

p=225

Chapter 3,-Page 71 Number 6.

Q=200-300p+120i+65t-250 Ac+400 Aj

3750 + 4000 = 5100 cups demand curve Q=200-300P+120(10)+65(60)-250(15)+400(10)

The effect is to raise the y-intersect of the demand curve by 5000 units, but not to change the slope of the demand curve.

250(5000)=400(Aj)

Aj= 3125

She would have to expend $3,125 to counteract the competitors advance.

Chapter 4,-Page 106 Number 6.

=%change in quantity / percentage change in price

((x- 4000)/4000)/((70-63)/70)

((x-4000)/4000)*10=2.5

.25=x-4000/4000

1000=x-4000

x=5000

will revenue increase

Yes -- revenue will increase. Why?

The initial condition, with price at 70, yields 70(4000)=280000

The next condition, with price at 63, yields 63(5000)=315000

4) Chapter 4,-Page 107 Number 15.

a. 20

(3.5-3)/(3)

.20/.1666

- 1.25

b. Sales of chocolate syrup increased because chocolate syrup is a complementary good to vanilla ice cream. The more people eat vanilla ice cream, the more they eat chocolate syrup. You would measure the effect by noting the % price difference in ice cream related to the % change in purchases of chocolate syrup.

c. Effect on total revenue = total revenue should increase, because changing the price by 16% created a 20% change in quantity sold.

5) Chapter 4, Answer the following question which is based on Page 107, Number 17 but has some changes:

The demand curve for product X is given as Q = 2000-20P.

a. How many units will be sold at $10?

Q=2000-20(10)=1800

b. At what price would 2,000 units be sold? 0 units? 1,500 units?

2000=2000-20P -- at no price -- to sell 2000 units, price must be $0.

0=2000-20p

P=100

To sell 0 units, price must be 100.

1500=2000-20p

-500=-20p

p=25