# Event a a fall in the price of cds event b sellers of

• Notes
• 113
• 89% (298) 265 out of 298 people found this document helpful

This preview shows page 19 - 24 out of 113 pages.

##### We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
The document you are viewing contains questions related to this textbook.
Chapter 10 / Exercise 67
Applied Calculus
Berresford/Rockett
Expert Verified
Event A: A fall in the price of CDs Event B: Sellers of music downloads negotiate a reduction in the royalties they must pay for each song they sell. Event C: Events A and B both occur.
##### We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
The document you are viewing contains questions related to this textbook.
Chapter 10 / Exercise 67
Applied Calculus
Berresford/Rockett
Expert Verified
No Change In SupplyAn IncreaseIn SupplyA Decrease In SupplyNo Change In Demand P Q P Q P Q An Increase In Demand P Q P Q P Q A Decrease In Demand P Q P Q P Q 3. How Prices Allocate Resources Efficiency: Max production, min cost The highest bidder get the goods. When demand increases, who will be served? When demand increases, who can sell their products?
Review questions: 1. The following table shows the supply and demand in the market for ice cream cones in Houston. What is the equilibrium price and quantity?
2. The following graph shows the market for pianos in 2011. Between 2011 and 2012, the equilibrium quantity of pianos remained constant, but the equilibrium price of pianos decreased. From this, you can conclude that between 2011 and 2012, the supply of pianos__________(increased or decreased) and the demand for pianos___________(increased or decreased) 3. The market price of pizza in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because several pizzerias in the area have recently gone out of business. Other students attribute the increase in the price of pizza to a recent increase in the price of hamburgers at local burger joints. Everyone agrees that the increase in the price of hamburgers was caused by a recent increase in the price of ground beef, which is not generally used in making pizza. Everyone also agrees that pizzerias and burger joints are entirely separate entities—that is, there aren’t places that serve both pizza and hamburgers.
The first group of students thinks the increase in the price of pizza is due to the fact that several pizzerias in the area have recently gone out of business. On the following graph, adjust the supply and demand curves to illustrate their explanation for the increase in the price of pizza. The second group of students attributes the increase in the price of pizza to the increase in the price of hamburgers. On the following graph, adjust the supply and demand curves to illustrate their claim. Suppose that both of the events you previously analyzed are partly responsible for the increase in the price of pizza. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes was the dominant cause of the increase in the price of pizza?