Assume equations 1 and 2 below were estimated from the data gathered that will represent the demand and supply functions
Posted: Thu May 19, 2022 8:13 am
Assume equations 1 and 2 below were estimated from the data
gathered that will represent the demand and supply functions
respectively of an individual buyer and seller respectively for
product π.
ππ =65,000β11.25π +15π β3.75πΌ+7.5π΄ Eq.1 $$%
ππ =7,500+14.25π β15π β3.75πΆ Eq.2 $$&
where ππ β price of product π; ππ β price of product π; πΌ β
average consumerβs income; π΄ β advertising expenditure; ππ β price
of product π; and πΆ β cost of production.
Use the following additional information: the price of a related
product, π, is P41.25; the average consumerβs income is P12,000;
advertising expenditure is P2,500; the price of product π is P90;
and the cost of production is P1,200. There are 30 identical buyers
and 50 identical sellers in the market for product π.
Is product π a normal or an inferior product? Justify.
How are product π and product π related for the buyer?
Explain.
On the part of the seller, what kind product π is?
Using the market demand function, what is π that will make all
the buyers stop $
purchasing this product? Round-up to two decimals.
What is the interpretation of the parameter π of the market
demand function?
What is the interpretation of the parameter π of the market
demand function?
What is the interpretation of the parameter π of the market
supply function?
What is the market price of product π? Round-up to two
decimals.
What is the equilibrium quantity in this market?
What is the price range that will result to a surplus in the
market?
What is the price range that will result to a shortage in the
market?
If the government will intervene in this market and imposes that
the minimum price will be 20% more than the market price,
12. . How much would be the quantity demanded? Round-up to two
decimals.
13. How much would be the quantity supplied? Round-up to two
decimals.
14. . From L and M, what is the condition in the market? Explain
concisely.
If the new supply equation will be ππ β²$ = 26,250 +
712.50πβ²$,
15. What would be the new equilibrium price (round-up to two
decimals)?
How many of this product will be bought and sold at this new
market price? Round-up to two decimals.
What is the specific reason for this change in supply
gathered that will represent the demand and supply functions
respectively of an individual buyer and seller respectively for
product π.
ππ =65,000β11.25π +15π β3.75πΌ+7.5π΄ Eq.1 $$%
ππ =7,500+14.25π β15π β3.75πΆ Eq.2 $$&
where ππ β price of product π; ππ β price of product π; πΌ β
average consumerβs income; π΄ β advertising expenditure; ππ β price
of product π; and πΆ β cost of production.
Use the following additional information: the price of a related
product, π, is P41.25; the average consumerβs income is P12,000;
advertising expenditure is P2,500; the price of product π is P90;
and the cost of production is P1,200. There are 30 identical buyers
and 50 identical sellers in the market for product π.
Is product π a normal or an inferior product? Justify.
How are product π and product π related for the buyer?
Explain.
On the part of the seller, what kind product π is?
Using the market demand function, what is π that will make all
the buyers stop $
purchasing this product? Round-up to two decimals.
What is the interpretation of the parameter π of the market
demand function?
What is the interpretation of the parameter π of the market
demand function?
What is the interpretation of the parameter π of the market
supply function?
What is the market price of product π? Round-up to two
decimals.
What is the equilibrium quantity in this market?
What is the price range that will result to a surplus in the
market?
What is the price range that will result to a shortage in the
market?
If the government will intervene in this market and imposes that
the minimum price will be 20% more than the market price,
12. . How much would be the quantity demanded? Round-up to two
decimals.
13. How much would be the quantity supplied? Round-up to two
decimals.
14. . From L and M, what is the condition in the market? Explain
concisely.
If the new supply equation will be ππ β²$ = 26,250 +
712.50πβ²$,
15. What would be the new equilibrium price (round-up to two
decimals)?
How many of this product will be bought and sold at this new
market price? Round-up to two decimals.
What is the specific reason for this change in supply