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

brief explain of keynesian consumption theory

Suppose you have 10 individuals with values {$1, $2, $3, $4, $5, $6, $7, $8, $9, $10}.  Your marginal cost of production is $2.50.  What is the profit-maximizing price?  Using this


The Effects of Advertising on the Demand Curve: Advertising targets to: • Change the slope of the demand curve which means make it more inelastic. This is done by generat

Define the adoption of economic institutional arrangement in analytical frameworks. Adoption of Economic Institutional Arrangement: The third step for studying an economi



Production without capital is hard for us even to imagine. Nature cannot furnish goods and materials to man unless he has the tools and machinery for mining farming forestry fishin

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