Quantity demanded and supplied , Managerial Economics

Assignment Help:

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.


Related Discussions:- Quantity demanded and supplied

Distinguish between positive and negative externalities, Question 1: 1 ...

Question 1: 1 Explain the importance of barriers to entry in the control of Monopoly rents. 2 Discuss the extent to which competition leads to market promotion? Questi

Profit maximization, arguments in favour of traditional theory of profit ma...

arguments in favour of traditional theory of profit maximization

Calculate the output and price in market, Question: Discuss the pricing...

Question: Discuss the pricing practices adopted by firms under different market structures. OR A firm produces a good, which is sold on delivery and in restaurants. The d

Describe models of oligopoly, Question 1: (a) Describe the argument tha...

Question 1: (a) Describe the argument that market entry erodes profits in the long run. (b) Give some reasons and discuss possible strategies used for profits to persist eve

Extraordinary cyclical fluctuations-hayek explaination, Hayek explaination ...

Hayek explaination Under a fractional reserves system, it is possible for the banking system to supply resources to entrepreneurs for investment in excess of resources that are

Factors affecting the total market demand, Factors affecting the total mark...

Factors affecting the total market demand These are broadly divided into the determinants of demand and conditions of demand. (a)      Own price of the product This

Income elasticity of demand, Aside from the price of a product and its subs...

Aside from the price of a product and its substitutes, another significant element of demand for a product is consumer's income. As noticed previously, relationship between demand

Cause the equilibrium, a)      The production-possibilities curve is? b)...

a)      The production-possibilities curve is? b)      If there is a shortage in the provider of a product, we can conclude that its price: c)      An enhance in supply and a

Gross domestic product, Gross Domestic Product A measure of national ec...

Gross Domestic Product A measure of national economic activity, GDP is measured from two approaches. GDP can be viewed as the total value of all goods and services produced in

Marijuana, Plot the demand schedule and draw the demand curve for the data ...

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

Write Your Message!

Captcha
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