A large number of firms are capable of producing chocolate- covered cockroaches. The linear, upward-sloping supply curve starts on the price axis at $ 6 per box. A few hardy consumers are willing to buy this product (possibly to use as gag gifts). Their linear, downward- sloping demand curve hits the price axis at $ 4 per box. Draw the supply and demand curves. Does an equilibrium occur at a positive price and quantity? Explain your answer.
Answer to relevant QuestionsUsing the supply and demand functions for avocados in the chapter, derive the demand and supply curves if pt = $ 0.80, Y = $ 4,000, and pf = $ 0.95. What is the equilibrium price and quantity of avocados?According to Borjas (2003), immigration into the United States increased the labor supply of working men by 11.0% from 1980 to 2000 and reduced the wage of the average native U. S. worker by 3.2%. Draw a supply- and- demand ...Use a supply-and-demand diagram to show the effects of occupational licensing on the equilibrium wage and number of workers in an occupation as described in the Mini-Case “Occupational Licensing.” Quebec, Canada, offers a per-child subsidy on day care for young children that lowers the price to $ 7 per child as of 2011 (at a cost of about $ 10,000 per child per year).a. What is the effect of this subsidy on the ...Suppose that the demand curve for wheat in each country is inelastic up to some “ choke” price p*— a price so high that nothing is bought— so that the demand curve is vertical at Q* at prices below p* and horizontal ...
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