2 Graph the AE equation both before and after the shock on one graph and also

# 2 graph the ae equation both before and after the

This preview shows page 5 - 9 out of 22 pages. 13.The profit maximizing quantity (in cups) of lemonade is .Points Earned:3.0/3.0Correct Answer(s):3014.The corresponding maximum profit is \$Points Earned:3.0/3.0Correct Answer(s):9, 9.0, 9.0015.Suppose that there was a demand shock so that the new estimated demand function for lemonade in your neighborhood changes to:Q = 100 - 100 PA demand curve would change like this due to:A) a tax increaseB) a tax decreasePoints Earned:3.0/3.0Correct Answer(s):B16.The new profit (revenue) maximizing price is cents. (don’t use a decimal point in this answer!)Points Earned:3.0/3.0309.0050 Correct Answer(s):5017.The new profit maximizing quantity (in cups) of lemonade is .Points Earned:3.0/3.0Correct Answer(s):5018.The new corresponding maximum profit is \$Points Earned:3.0/3.0Correct Answer(s):25, 25.0, 25.0019.Imagine that you kept the “sticky” lemonade price even though demand has changed (use the price you found in #12). What is the quantity sold now? Points Earned:3.0/3.0Correct Answer(s):7020.NOTE:There is no graphing component to be collected for this homework. However, you should be comfortable creating two separate graphs from the above questions in part 2. Youshould be able to:1.Draw a demand curve graph showing both the original and new demand curves. Label equilibrium price and quantity in in both cases.2.Draw the total revenue curves for both cases in a graph directly below the demand curve graph (remember the horizontal axes for the demand curve graph and the total revenue graph are the same).5025.0070 Again imagine that you kept the “sticky” lemonade price even though demand has changed (use the price you found in #12). What is the profit now? \$Feedback:The excel table below shows solutions for all of part 2.  #### You've reached the end of your free preview.

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