Supply and demand, Microeconomics

a. Using the data in the tables below, graph on the grid the demand and supply curves for milk, assuming that all factors other than the price of milk are held constant.  Connect adjacent data points with straight line segments. Label the demand curve "DD" and the supply curve "SS".

The equilibrium price of milk is:

The equilibrium quantity of milk is:

     b. News flash:  "New study shows milk causes baldness in mice." Suppose the consumers' reaction is that at each price the quantity they are willing to buy falls by 4 gallons.  Draw the new demand curve, and label it "D'D'".

The new equilibrium price is:

The new equilibrium quantity is:

c. News flash:  "Congress passes calcium tax of $3 per gallon of milk." 

Putting the buyer price on the vertical axis, graph the new supply curve on the axes above.  Label it "S'S'".Assuming that D'D' is still the demand curve, the new buyer price is:
                                             The new seller price is:  _____

The equilibrium quantity is now how many gallons?

Compared to (b), how much of the tax is paid by the buyer?

How much of the tax is paid by the seller?                             _____

Posted Date: 3/20/2013 1:39:12 AM | Location : United States







Related Discussions:- Supply and demand, Assignment Help, Ask Question on Supply and demand, Get Answer, Expert's Help, Supply and demand Discussions

Write discussion on Supply and demand
Your posts are moderated
Related Questions
Low standards of living: In developing nations general standards of living tend to be very low for the vast majority of the people. These low standards of living are manifest

Carbon Tax: An environmental tax that is imposed on products that utilize carbon-based materials and thus contribute to greenhouse gas pollution (comprisinggas, oil, coal and other

how can a price ceiling make consumers better-off? under what conditions might it make them worse off?

Budget Constraints   * The Budget Line - The budget line indicates all the combinations of 2 commodities for which total money spent equals the total income. * The Budget

What happens when oil eventually runs out?? can''t we just pay doctors and nurses more money?? The unemployed should get off their backsides and get a job??

Sources of Economic growth: Human resources: Investment in human capital is considered as an important factor for economic growth. This is done by increasing the quality of

Ask qdescribe average and marginal revenue under imperfect competitionuestion

If at point A sacks of rice is 205 and sacks of corn is 0. What is the decrease in rice production?

Creating Mobile Telephone Infrastructure: The second concept of subsidising the telecom infrastructure required for providing services in rural and remote areas is designed to

Consider an upstream firm in Russia that mines iron ore at a total cost of $15 q , where q is the number of tons of ore. This upstream firm then ships ore to Germany for processi