Question: Please help me on this qeustion QUESTION 3 Suppose that apples cost $1. A consumer feels that they are willing to give up 4 apples

Please help me on this qeustion

Please help me on this qeustion QUESTION 3 Suppose that apples cost

QUESTION 3 Suppose that apples cost $1. A consumer feels that they are willing to give up 4 apples in order to consume a banana, as long as they are consuming 10 or less bananas. After the 10th banana their appreciation for them is not as high, so they are willing to trade 2 apples for an additional banana, as long as their banana consumption is less than or equal to 20. After the 20th banana they are fed up of bananas and would not give up a single apple for a banana. Note: All parts are worth 10 points. Questions: (1) What is the demand curve for bananas (a picture, fully lablled, is enough) (2) Assume the supply curve for bananas is S(p)=5p. What is the equilibrium price and quantity in the market for bananas? (3) Suppose that there is a natural disaster in apple growing countries, so now the price of apples is $2. Assume that the resources used in banana production are not suitable for apple production, so this change in the price of apples leaves supply of bananas unaffected. What is the new equilibrium price and quantity in the market for bananas? Attach File

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!