CH 1 Exercises

CH 1 Exercises - CHAPTER #1 INTRODUCTION 1. The demand and...

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CHAPTER #1 – INTRODUCTION 1. The demand and supply schedules for a particular product are believed to be as follows: Price Quantity demanded Quantity supplied ($/unit) (units/month) (units/month) 100 1 000 25 000 90 3 000 22 000 80 5 000 19 000 70 8 000 15 000 60 12 000 11 000 50 18 000 6 000 40 26 000 1 000 i) Plot the demand and supply curves on an appropriate graph. Determine graphically the equilibrium levels of price and quantity demanded and supplied. ii) Assume that the price is fixed at $45 per unit. Would there be an excess supply or demand at this price? Under this situation, determine graphically the price that could eventually be paid for the product on the black market. iii) Assume that the supply for the product increases to a higher level (the supply curve shifts to the right) such that 6000 additional units are supplied at each price level. Determine graphically the new equilibrium price. iv)
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This note was uploaded on 02/14/2011 for the course MIME 310 taught by Professor Bilido during the Spring '08 term at McGill.

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CH 1 Exercises - CHAPTER #1 INTRODUCTION 1. The demand and...

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