to question 7 change You have been hired by a new firm selling electronic dog fe
ID: 1181708 • Letter: T
Question
to question 7 change
You have been hired by a new firm selling electronic dog feeders. Your client has asked you to gather some data on the supply and demand for the feeder, which is given below, and address several questions regarding the supply and demand for these feeders.
Quantity Demanded
Quantity Supplied
$300
500
1800
270
600
1700
240
700
1600
210
800
1500
180
1000
1400
150
1100
1300
120
1200
1200
90
1300
1100
60
1400
1000
30
1500
900
10
1600
800
Your client has asked that you develop a report addressing the following questions so that you can present these findings to their Board of Directors:
Questions:
Price/Feeder
Quantity Demanded
Quantity Supplied
$300
500
1800
270
600
1700
240
700
1600
210
800
1500
180
1000
1400
150
1100
1300
120
1200
1200
90
1300
1100
60
1400
1000
30
1500
900
10
1600
800
Explanation / Answer
The key to this question is realizing you are given a supply and demand table. Remember how to graph these...you need to put prices on the y axis (vertical) and quantity goes on the x axis.
1. just write out all the price and quantities listed on the table and play connect the dots! Only connect dots to other dots from teh same column! This will graph your supply and demand
2. You should notice that when you connect the dots for demand you get a line that is downward sloping - as price falls the quantity demanded increases. For supply you will notice that your line is upward sloping - as price increases the quantity supplied increases. This is the laws of supply and demand illustrated!
3. Simply find the price where supply equals demand, that means where for one price both values are equal. Hint its at $120.
4. Price floor is set above the EQ price so it doesnt matter! We are still just at equilibrium found in 3.
5. Now the price floor is below the EQ so it matters! Just go to where price equals $90 and that will tell you how much is demanded and how much is supplied.
6. A little weird but I think it means that the supply curve now has the same quantities supplied but for half the price. That means your supply curve from 1 just shifts rightward and all prices are cut in half.
7. If incomes rise then demand....thats right it increases! Shifting that bad boy to the right.
8. If supply decreases this can be seen by shifting supply to the left.
9. Normal good: as income increases demand increases. Inferior good: as income increases demand decreases. This would definitely change question 7, because if the good was inferior we would actually see a decrease (leftward shift) in demand!
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