2. (Suppose the estimated supply function for avocados is given by QS = 48 + 15p...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
2. (Suppose the estimated supply function for avocados is given by QS = 48 + 15p - 10pf, where pf is the price of fertilizer. The estimated demand for avocados is given by Qd = 233-40p + 5pt, where pt is the price of tomatoes per pound. a. Solve for the initial equilibrium price and quantity of avocados if the price of fertilizer, pf,is equal to $0.35 per lb. and price of tomatoes, pt, is equal to $0.80 per lb. b. Solve for the new equilibrium price and quantity of avocados if the price of fertilizer, pf, increases to $0.90 per lb. and price of tomatoes, pt, remains $0.80 per lb. c. Use these equilibrium values from parts a. and b. to solve for the price elasticity of demand for avocados. d. Given your calculations, are avocados elastic, inelastic or unit-elastic? Have total expenditures on avocados increased, decreased, or not changed as a result of the change in the price of fertilizer? 2. (Suppose the estimated supply function for avocados is given by QS = 48 + 15p - 10pf, where pf is the price of fertilizer. The estimated demand for avocados is given by Qd = 233-40p + 5pt, where pt is the price of tomatoes per pound. a. Solve for the initial equilibrium price and quantity of avocados if the price of fertilizer, pf,is equal to $0.35 per lb. and price of tomatoes, pt, is equal to $0.80 per lb. b. Solve for the new equilibrium price and quantity of avocados if the price of fertilizer, pf, increases to $0.90 per lb. and price of tomatoes, pt, remains $0.80 per lb. c. Use these equilibrium values from parts a. and b. to solve for the price elasticity of demand for avocados. d. Given your calculations, are avocados elastic, inelastic or unit-elastic? Have total expenditures on avocados increased, decreased, or not changed as a result of the change in the price of fertilizer?
Expert Answer:
Related Book For
Posted Date:
Students also viewed these economics questions
-
Suppose the demand function for the Toyota Camry is given by Qd = 500 -12PC + 10PH - 5PG + 0.0001M, where PC is the price of the Toyota Camry (in thousands), PH is the price of the Honda Accord (in...
-
The Ministry of Tourism in the Republic of Palau estimates that the demand for its scuba diving tours is given by QD = 6,000 20P, where Q is the number of divers served each month and P is the price...
-
Saeed does not keep proper books of account for his business but he has provided the following details of his assets and liabilities. Further information 1. Land and buildings have been revalued at...
-
In January 2017, Vorst Company purchased a mineral mine for $2,640,000. Removable ore was estimated at 1,200,000 tons. After it has extracted all the ore, Vorst will be required by law to restore the...
-
Heavenly Mercy Hospital wants to improve the efficiency of its radiology department and its responsiveness to doctors needs. Administrators have observed that, every hour, doctors submit an average...
-
A golf pro wanted to learn the relation between the club-head speed of a golf-club (measured in miles per hour) and the distance the ball travels. He realized that there are other variables besides...
-
On January 1, 2010, Turner Construction Company agreed to construct an observatory for Dartmouth College for $120 million. Dartmouth College must pay $30 million upon signing and $30 million at the...
-
The monthly high and low levels of direct labor hours and total manufacturing overhead costs for Onyx Company are as shown: Level Direct Labor Hours Manufacturing Overhead Costs Highest observed...
-
Find the court decision located at 67 AFTR2d 91-718. a. Which court heard the case? b. Who was the judge(s)? c. Which tax year(s) is in question and in what year was the case decided? d. Which Code...
-
Marla is running clockwise around a circular track. She runs at a constant speed of 2 meters per second. She takes 58 seconds to complete one lap of the track. From her starting point, it takes her...
-
What is the difference between National Health Accounts and Health Consumption Expenditures?
-
Unless an exception or exclusion applies, in what specific order must tax attributes be reduced? A . Basis of all property, net operating loss ( NOL ) , general business credit carryovers, capital...
-
2. Convert 9210 to Binary, Octal and Hexadecimal using repeated division. Show your work. Answer: Binary: Octal: Hexadecimal:
-
The purpose of this project is to demonstrate your grasp of the concepts you have learned throughout the course and your ability to analyze the financial standings and history of a company. You...
-
B. Given a universal set of name strings as: Ali, Alan, Alice, Barb, Bob, Ben, Christie, Cora, Don, Dora, Fred, arranged in alphabetic order. Give a bit string representation of the following sets:...
-
Case Study: Smoothing and Compensating Losses in Investments Returns IFIs are exposed to the rate of return risk in the context of their overall statement of financial position exposures. An increase...
-
The following information is for Montreal Gloves Inc. for the year 2020: Manufacturing costs Number of gloves manufactured Beginning inventory $ 3,016,700 311,000 pairs 0 pairs Sales in 2020 were...
-
In the ability signaling model, suppose that firms can pay c* for a test that determines a workers ability. Does a firm benefit by testing workers?
-
An empirical study by Callison and Kaestner (2012) suggests that a 100% cigarette tax would be required to decrease adult smoking by as much as 5%. What does this result imply about the shapes of the...
-
The Application Occupational Licensing analyzed the effect of exams in licensed occupations given that their only purpose was to shift the supply curve to the left. How would the analysis change if...
-
For the periodic processes and deadlines given below: a. Schedule the processes using RMS. b. Schedule using EDF and compare the number of context switches required for EDF and RMS Process Time...
-
For the periodic processes given below, find a valid schedule a. using standard RMS; b. adding one unit of overhead for each context switch. 22 P2 P1 P3 Process P1 P2 P3 Time Deadline 2 30 57 40 120...
-
For the given set of periodic processes, all of which share the same deadline of 12: a. Schedule the processes for the given arrival times using standard ratemonotonic scheduling (no data...
Study smarter with the SolutionInn App