Problem Set 2 ΜΆ Supply and Demand Question 1
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- Question 33
- Question 34
- Question 36
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| Question 32 Suppose the cable TV industry is currently unregulated. However, due to complaints from consumers that the price of cable TV is too high, the legislature is considering placing a price ceiling on cable TV below the current equilibrium price. Assuming the government does make this price ceiling law, please construct a diagram that shows the impact of this law on the cable TV market, and please briefly explain the effects on market prices and quantities with supply and demand analysis. Also, if the cable TV company is worried about disgruntling customers, the company may introduce a different type of programming that is cheaper for the company to provide yetis equally appealing to customers. What would be the effects of this action Question 33 Suppose that the resale of tickets to professional football games is illegal in Missouri. Due to the high demand for Chiefs (who play in Kansas City, Missouri) tickets there is a shortage of tickets at the current ticket price. Given that the Chiefs will not raise the price at which they sell the tickets, what would be the result of allowing tickets to be resold in a secondary market at whatever price the market would support If speculators entered the market and began buying tickets directly from the Chiefs in hopes of reselling the tickets later, what would happen to the line outside of the ticket offices when the tickets are initially sold Question 34 The domestic demand for wheat is ππ π·π·π·π· = 1000 β 25ππ, and the export demand is ππ π·π·π·π· = 500 β 25ππ. Graph the domestic, export, and total demand curves for wheat. Question 35 A local retailer has decided to carry a well-known brand of shampoo. The marketing department tells them that the quarterly demand by an average man is ππ ππ = 3 β 0.25ππ and the quarterly demand by an average woman is ππ ππ = 4 β 0.5ππ The market consists of 10,000 men and 10,000 women. How may bottles of shampoo can they expect to sell if they charge $6 per bottle Question 36 General Motors estimates that US. demand for its newest product will be ππ ππππ = 30,000 β 0.5ππ Export demand will be ππ πΈπΈπΈπΈ = 25,000 β 0.5ππ. The total market demand curve for this product will be a kinked or a straight line Question 37 The world demand for power transmission wire is made up of both domestic and foreign demands. Thus, the total demand is the sum of the two sub-demands, which are given as Domestic demand ππ ππ = 5 β Foreign demand ππ ππ = 3 β 0.00075ππ ππ , where and are in dollars per pound, and and are in pounds per day. a. Determine the world demand for power transmission wire. b. Determine the prices at which domestic and foreign buyers would enter the market. c. Determine the domestic and foreign quantities at ππ = $2.5 per pound. Check to see if the sum of and equals Q. d. Determine total rate of purchases at ππ = $4.00 per pound. Download 383.12 Kb. Share with your friends:
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