Urgent. Need in 24 hours.

Q5 Answer

Equate the Demand and Supply Equation

1600-300p = 1400+700p

1600-1400 =700p+300p

200=1000p

P=200/1000

P = $0.2

Now, equate the price in any of the equation

Qd = 1600-300*0.2 = 1540

So, equilibrium price is $0.2 and Equilibrium quantity is 1540 in the market for chocolate bars.

Q6

a)

b) If the actual price in this market were above the equilibrium price, there would be Excess Supply and price would have to decrease, so that Excess Supply can decrease and market reach to the Equilibrium

c) If the actual price in this market were below the equilibrium price, there would be shortage and price would have to increase, so that Supply can increase and market reach to the Equilibrium

Q8)

Q9

Ep = % Change in Q/% Changes in P

Ep = - 40/7 =-5.71

Q10)

% Change in Quantity demanded = (-0.5) *(-50) = +25%

New Quantity demanded = 40*1.25 = 50 units.

Q11

Arc Elasticity of Supply

Q12)

i) For Business Travelers

ii) For vacationers

Q24

Conditions of producer’s equilibrium: (i) MR=MC (Marginal Revenue = Marginal Cost) (ii) MC must be rising at the point of equilibrium or MC curve must cut MR curve from below.

Q29

a) The opportunity cost of something is what must be forgone to acquire it. Aunt must forgo his job to open the store.

b) The brother’s opportunity cost of running a hardware store for a year is $550, 000 which has $500,000 for the rent and $50,000 for the job.

He should not open the store as the Opportunity cost are less than it what he could have been received if he decides to open the store and can incur a loss of $40000 ($550000-$510000)

Q30)

MRTSLK =

MRTSLK =

Q31

APL = TPL/L

MPL =

Q33)

.

Q37)

Here, Marginal Cost would be = 601*301-600*300 = $901

Marginal Benefit = $550

Because the marginal benefit smaller than the cost. Offer should not be accepted.

020406080100120140160456789PriceQuantityDemand & Supply Curve Quantity DemandedQuantity Supplied

LTPLAPLMPL

122

2634

31246

41644

5183.62

61830

7162.29-2

OutputTFCTVCTCMCAFCAVCATC

0502070

15050100305050100

2507012020253560

3501001503016.6666733.3333350

4501502005012.537.550