Quantity demanded and supplied , Managerial Economics

a.  A major freeze destroys a large number of orange trees in Florida

Ans- Since the freeze destroyed a large number of orange trees in Florida the number of oranges the sellers can offer for sale would decrease.  Due to the reduced supply the price would rise. Other things being constant, quantity demanded would contract due to rise in price.

b.  The scientists in the agricultural extension service of the University of Florida discover a way to double the number of oranges produced by each orange tree.

Ans- The new technique would result in an increased supply of oranges. This would lower the price of oranges. Other things being constant, quantity demanded would rise due to fall in the price of oranges.

c.   The American Medical Association announces that drinking orange juice can reduce the risk of heart attack.

Ans- Due to this announcement made by the American Medical Institute more people would prefer to have orange juice to avoid the risk of heart attack. This would increase the demand for orange juice and thus will raise its price. Other things being equal higher the price, higher is the quantity supplied.

d.  The price of Florida grapefruit falls

Ans- The fall in price of grapefruit would on one hand result in a higher quantity demanded and on the other hand sellers would be less willing to offer a larger quantity for sale at reduced price. The sellers and buyers would negotiate a price at which they are fully satisfied and have no tendency to deviate from it. This will be the equilibrium price at which quantity demanded and supplied are equal.

Posted Date: 3/11/2013 2:33:38 AM | Location : United States







Related Discussions:- Quantity demanded and supplied , Assignment Help, Ask Question on Quantity demanded and supplied , Get Answer, Expert's Help, Quantity demanded and supplied Discussions

Write discussion on Quantity demanded and supplied
Your posts are moderated
Related Questions

SHORT RUN OUTPUT AND PRICE In monopolistic competition, it's the product differentiation that permits its price without losing sales.  Due to brand loyalty consumers will c

Write the forecasting techniques There are many forecasting techniques available to person assisting the business in planning its sales. Take for instance a forecasting metho

BUSINESS CYCLES Meaning: The business cycle is the tendency for output and employment to fluctuate around their long-term trends.  The figure below presents a stylised

The short run equilibrium of monopolist is displayed below in figure. Figure: Abnormal Profit under Monopoly AR is the average revenue curve, MR is marginal revenue cu

In the national income analysis, investment refers to the value of than part of the aggregate output for any given time period which takes the form of construction of new structure

Danger of over-specialising   A country may feel that in its long-term interests it should not be too specialized. A country may not wish to abandon production of certain

Disadvantages of Mixed Economy Large monopolies can still exist in the private sector, and so competition does not really take place There is likely to be a lot of bureaucr

Plot the demand schedule and draw the demand curve for the data given for Marijuana in the caseabove.

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2.