Compute the initial equilibrium after only supply changes

Assignment Help Econometrics
Reference no: EM13235897

Suppose that the demand function for apartments in a competitive market is initially D(p)=40-2p and there are 10 apartments. However, after observing how profitable it is to rent apartments, owners construct more houses and the number of available apartments increases by 100%. Then some other tenants decide to move to the town and increase the overall demand such that the new demand is given by D'(p)=60-2p. Compute the initial equilibrium (i.e., the equilibrium price and quantity), the equilibrium after only supply changes, and the terminal equilibrium which takes into account the demand change as well. Plot all cases on the same graph, clearly state the equilibrium point and the intersection points of both demand and supply curves with the axes.

Reference no: EM13235897

Questions Cloud

Find the final temperature of the water : Suppose 0.0450kg of steam (at 100.°C) is added to 0.450kg of water (initially at 20.5°C), Find the final temperature of the water after equilibrium is reached
Describe the best course of actions for head of operations : Draw a decision tree and describe the best course of actions for the head of operations.
Ow many ways can the horses come in first second or third : You and your friends have decided to go to The Kentucky Derby. There are 12 horses in the race. How many ways can the horses come in first, second, or third?
How are organizational information systerms related : How are organizational information systerms related to company stragegy? How does strategy affect the information systems a company develops and uses?
Compute the initial equilibrium after only supply changes : Suppose that the demand function for apartments in a competitive market is initially D(p)=40-2p and there are 10 apartments. However, after observing how profitable it is to rent apartments, owners construct more houses
Analyze key differences between behaviorist and cognitive : Analyze key differences between the Behaviorist and Cognitive models of learning. Focus on where control of learning occurs in each approach.
Project management software tool against an open source tool : You need to select a tool for project planning and scheduling from various tools available in the market. What factors would you consider in selecting the most appropriate software tool for your company?
Distinguish between motivation, knowledge skills : Distinguish between motivation, Knowledge Skills and Abilities (KSA), and environment. Demonstrate the importance of one of these elements utilizing specific examples.
What is q3 : Two new particles, which have identical positive charge q3, are placed the same 0.0434 meters apart, and the force between them is measured to be the same as that between the original particles, What is q3

Reviews

Write a Review

Econometrics Questions & Answers

  Find elasticity nd evaluate numerically at equilibrium value

The market supply and demand function for good X are shown below: X^s=S(P,W)=30P-W X^d=D(P,Y) =6Y/P Where p=price, x=quantity, W= labor cost, y= consumer total income. Find elasticity n(P*,Y) and evaluate it numerically at the equilibrium values a..

  By how much should it decrease price

An auto dealership estimates that its demand curve has an elasticity of 2.78. If it wishes to increase sales by 12%, by how much should it decrease price What will happen to revenue (rise or fall) If instead it raises price by 20%, what is the per..

  What happens to the supply and demand curves

Suppose Springfield's economy moves into a recession and Y falls to $9 and rising unemployment allows widget makers to reduce wages to $18 per hour. What happens to the supply and demand curves.

  What is the point estimate of the population mean

Warren County Telephone Company claims in its annual report that "the typical customer spends $55 per month on local and long-distance service." A sample of 12 subscribers revealed the following amounts spent last month. $66,$63,$68,$60,$61,$60,$6..

  What is the steady state level of capital

In the derivation of the Solow growth model, we assumed that government spending and taxes less transfers were both zero. Relax that assumption and assume that both are constant graction of GDP, say T = G = gammaY. What is the steady state level o..

  How many balls baseball manufacturer is currently producing

A baseball manufacturer is currently producing 10,000 baseballs. At this level of production, MC is estimated at $2.50 and average cost at $2.00. Baseballs sell for $3.00 at this production level, and marginal revenue is $2.25.

  Determine the breakeven output and total sales revenues

a). Determine the breakeven output and total sales revenues and draw the cost-volume-profit chart, and b). determine the output that would generate a total profit of $60,000 and the total sales revenues at the output level; draw the cost-volume-pr..

  Compute the arc price elasticity of demand

its popular Mmmm Sundae from $2.25 to $1.75. As a result, the firm's daily sales of these sundaes have increased from 1,500/day to 1,800/day. Compute the arc price elasticity of demand over this price and consumption quantity range.

  Show effects of innovation on the market price and quantity

To quell outrage over tuition increases, the collage places $55 limit on the price of textbooks. How many textbooks will be sold now C. while the price limit is still in effect, automated publishing increases the efficiency of textbook production.

  Describe is the pricing strategy rational

According to the Cahner's In-Stat Group, the number of worldwide wireless phone subscribers will soon reach the 1 billion mark. In the United States alone, the number of wireless subscribers is projected to grow by almost 17 million subscribers pe..

  What is the equivalent uniform annual cost of the 20-year

Maintenance expenditures for a structure with a 20-year life will come as periodic outlays for overhaul of $4,000 at the end of the 5th year, $6,000 at the end of the 10th year, and $7,500 at the end of the 15th year. With interest at 8%, what is ..

  What is the amount of her unrecaptured sec 1250 gain

An uninsured pony with an adjusted basis of $20,000 and FMV of $35,000, which her daughter uses only for personal use, is injured while attempting a jump. Because of the injury, the uninsured pony has to be destroyed by a veterinarian.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd