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

Income elasticity of demand, demand function is q=4850 - 5p(1) + 1.5p(2) + ...

demand function is q=4850 - 5p(1) + 1.5p(2) + 0.1 Y WHEN Y=10000 p(1)=200 p(2)= 100 find income elasticity of demand for p(1)

Impact of inflation, THE IMPACT OF INFLATION Inflation has different e...

THE IMPACT OF INFLATION Inflation has different effects on different economic activities on both micro and macro levels.  Some of these problems are considered below: i.

Banking system, T HE BANKING SYSTEM Consists of all those institutions...

T HE BANKING SYSTEM Consists of all those institutions which determine the supply of money.  The main element of the Banking System is the Commercial Bank (in Kenya).  The sec

Costs of unemploment and inflation, COSTS OF UNEMPLOMENT AND INFLATION   ...

COSTS OF UNEMPLOMENT AND INFLATION   In  an  economy  both  unemployment  and  inflation  have  adverse effects  and policy makers  formulate policy instruments to contain both

A chemical producer dumps toxic waste into a river, A chemical producer dum...

A chemical producer dumps toxic waste into a river. The waste decreases the population of fish, decreasing profits for the local fishing industry by $100,000 per year. The firm cou

Buffer stocks and stabilization funds - stabilize farm price, Buffer stocks...

Buffer stocks and stabilization funds In this case the government buys up part of the supply when output is excessive, stores this surplus, and resells it to consumers in time

Calculate the equilibrium level of national income, Question: EITHER ...

Question: EITHER Nowadays, there is an urgency in Mauritius to introduce a rapid transit system in order to reduce traffic congestion and shift towards a more efficient mode

PRODUCTION THEORY, Q=5K0.4 L0.6 WHERE K is number of mchine,L s number of l...

Q=5K0.4 L0.6 WHERE K is number of mchine,L s number of labour, price of unit is RM24 & wages og each lanour rm12. the company constraint by it budget rm 1500 per time period. a) co

Relationship between mr and elasticity, Suppose that the price elasticity o...

Suppose that the price elasticity of demand for cereal is -0.75 and the cross-price elasticity of demand between cereal and the price of milk is -0.9. If the price of milk rises by

Cost of unemployment, Cost of Unemployment Unemployment is a problem b...

Cost of Unemployment Unemployment is a problem because it imposes costs on society and the individual.  The cost of unemployment to a nation can be categorized under three hea

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