A)Please list the equilibrium price of hot dogs B) based on supply and demand cu
ID: 1188872 • Letter: A
Question
A)Please list the equilibrium price of hot dogsB) based on supply and demand curves you created what will equilibrium quantity of hot dogs be
C)what condition would exist and to what degree is the government instituted a price floor at $5.50 per hot dog
D)what condition would exist and what degree of the government instituted a price ceiling at $2.50 per hot dog.
E) at time hot dog manufacturers make offers such as buy one get one free. Upon which demand related principle is this offer based
F)why are hot dog manufacturers willing to offer more hot dogs for sale as hot dog prices rise
G) using the total receipts test, over a price range from 5.00 to 6.00, how would you characterize the demand for hot dogs, in terms of the price elasticity of demand. maining Time: 1 hour, 32 minutes, 19 seconds. uestion Completion Status QUESTION 57 1 points Save Answer ON A SEPERATE SHEET OF PAPER, use the following information to set up a combined supply and demand schedule, as well as to graph the supply and demand curves. You will use this information to answer questions 57-63 Assume we are studying the hot dog industry. In a given time period, demand for hot dogs is as follows: at a price of $1.00, 500 hot dogs are demanded. at a price of $2.00, 470 are demanded, while 430 ar e demanded at 93.0, 380 at $1.00, 300 at $5.00, 200 at $6.00, 90 at $7.00, and 10 at $8.00 , 380 at $4.00, 300 at A do sasmo tms, lhot do s plnr and s0l8.00,550 at $7.00, 500 at $6.00, 430 at s5.00, 350 at $4.00, 250 at $3.00, 140 at $2.00, and 50 at $1.00. Please list the equilibrium price of hot dogs.
Explanation / Answer
The following table shows demand and supply quantities at various price level:
(a) Equilibrium is where the demand (Q) meets supply (MC). This happens at price$4. Though demand is not exactly equal to supply, but the nearest point we can find is $4.
(b) The quantity of equilbrium at price $4,340 units of hot dog. Though the demand is 380 but the best possible supply at this price is 340.
(c) If aprice floor of $5.5 is apllied then the price is binding. This is because price floor is greater than market price. Therefore at $6 the demand woudl be 200 units. There will be excess suplly at this price.
(d) If price cieling is below equilibrium price, $4, then there price is binding. There will be exces demand at lower price.
(e) Buy one get one free is based on principle that more is preferred to less. WIth elastic demand suhc offer will lead to increased sales.
(f) As hot dog rpice increases, the demand falls, With offers, the demand would increase and supplier can sell at higher desired price.
(g) The price elastcity is measured as change in demand divided by change in price
price elasticy from 5 to 6.
AT $5 the demand is 300 and at $6 the demand is 200:
elasticty when price increases from $5 to $6
change in quantity / change in price
(300-200)/300 / (5-6)/5
=.33 / .2
=1.65
The demand is elastric since elasticty is greater than 1. A price decrease at this point will increase the demand by greater amount and the net weffect woudl be greater revenue.
P Q MC 1 500 50 2 470 140 3 430 250 4 380 350 5 300 430 6 200 500 7 90 550 8 10 600Related Questions
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