Answer Happy

2 3 QD = 200-38.15PO +8.35PS - 2Pc+10Inc + .8TS +.5M21 4 QS = -100+22.95PO-5PPI-10PS + 8Temp + 1Sup 5 6 Demand: 7 8 -Price of Substitutes: $18 9 10 -Price of Cheese: $15 11 12 -Income: $53,000 13 14 -Trade Shows/Competitions: $3 15 16 -Millennials = 42 million 17 18 19 Supply: -PPI: 110 -Price of Substitutes: $18 -Temperature: 60 -Number of Suppliers: 8,000 Price

a) When the price of Syrah increases by $1, do quantity supplied and quantity demand increase or decrease? Quantity demanded will decrease and the quantity supplied will increase for every $1 increase in the price of Syrah. b) By how much? what is the effect on quantity demanded and quantity supplied? The effect is that the quantity demanded will decrease by 38.15 mil for every $1 increase in price of Syrah and the quantity supplied will increase by 22.95 mil for every $1 increase in price of Syrah. c) Does a $1 decrease in the price of substitute bottles of wine shift the demand and supply curves to the left or right? The slope of Ps in demand curve is positive. It means that a $1 decrease in substitute will create an decrease in demand in the Syrah product. The demand curve will shift to the left. The slope of Ps in supply curve is negative which means that supply will increase if the price in the substitute decrease by $1 and the supply curve will shift to the right. d) By how much? The demand curve will decrease by 8.35 and shift to the left. The supply curve will increase by 10.00 and shift to the right.