MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Textbook Question
Chapter 4, Problem 4TY
The following table summarizes information about the market for principles of economics textbooks:
- What is the
market equilibrium price and quantity of textbooks? - To quell outrage over tuition increases, the college places a $55 limit on the price of textbooks. How many textbooks will be sold now?
- While the price limit is still in effect, automated publishing increases the efficiency of textbook production. Show graphically the likely effect of this innovation on the market price and quantity.
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The demand and supply curves for T-shirts are given by the following equations, where P is the price and Q is the quantity.
Demand: Q = 65000 – 50P Supply: Q – 5000 = 250P
Find the equilibrium price and quantity.
The table below shows the monthly demand and supply of gallons of Ghana Nuts Oil at different prices. Use the information in the table to answer the questions that follows:
Price per gallon
Quantity of gallons demanded
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20
5000
1000
25
4000
2000
30
3000
3000
35
2000
4000
40
1000
5000
Use the information in the table to sketch the demand and supply curve on the same axis. (NOTE: Graph sheet is not needed).
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Which of the prices would cause shortages? Calculate the shortages that may occur at those prices.
Suppose the Government of Ghana imposes a minimum price legislation which led to surpluses in the oil market, discuss two ways that can be use to address or mitigate the surpluses in the market.
Suppose the price of Ghana Nut Oil increase from 20 to 25, calculate the price elasticity of demand and supply of Ghana Nut Oil.
Demand and Supply which one is more…
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