Question
1. Consider the market for bananas at a local produce store. The manager has data on how much consumers will demand and how much his
1. Consider the market for bananas at a local produce store. The manager has data on how much consumers will demand and how much his distributors will supply at various prices. (I have answered it plz correct my answer and rectify ). What is the market clearing price and quantity? How did you arrive at that result?
The Market for Bananas | ||
Price | Supply | Demand |
50 | 100 | 35 |
45 | 90 | 40 |
40 | 80 | 45 |
35 | 70 | 40 |
30 | 60 | 55 |
25 | 50 | 50 |
20 | 40 | 55 |
15 | 30 | 60 |
10 | 20 | 75 |
5 | 10 | 80 |
2. Now consider the market for three kinds of chocolate at a candy store. The manager has data on how much consumers will demand and how much his distributors will supply for three different market segments: Premium, Generic, and Every Day.
What is the market clearing price and quantity for each segment? How did you arrive at that result?
Premium Chocolate | ||
Price | Supply | Demand |
2 | 300 | 5 |
1.75 | 100 | 10 |
1.5 | 80 | 20 |
1.25 | 70 | 50 |
1 | 30 | 100 |
0.75 | 0 | 200 |
0.5 | 0 | 20,000 |
0.25 | 0 | 40,000 |
Generic/Store Chocolate | ||
Price | Supply | Demand |
2 | 100 | 0 |
1.75 | 90 | 0 |
1.5 | 50 | 0 |
1.25 | 40 | 0 |
1 | 30 | 5 |
0.75 | 20 | 10 |
0.5 | 10 | 100 |
0.25 | 0 | 10,000 |
Every Day Chocolate | ||
Price | Supply | Demand |
2 | 200 | 0 |
1.75 | 70 | 0 |
1.5 | 30 | 0 |
1.25 | 20 | 0 |
1 | 10 | 0 |
0.75 | 0 | 100 |
0.5 | 0 | 1,000 |
0.25 | 0 | 20,000 |
3. A state government is issuing tax-free bonds to finance the building of a new bridge. The government will issue 10,000 bonds at an auction. The government will take the highest bid, the next highest, and so on until all the bonds are sold. Every winner pays the lowest price.
What is the market clearing price and quantity? How did you arrive at that result?
Bonds | ||
Price | Supply | Demand |
101 | 10,000 | 100 |
100.5 | 10,000 | 500 |
100 | 10,000 | 4,500 |
99.5 | 10,000 | 4,900 |
99 | 10,000 | 6,100 |
98.5 | 10,000 | 10,000 |
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
Number 1 All things unchanged the demand of bananas is determined by how much customers are willing and able to pay at the price listed Based on the data when the bananas were priced at 5 customers de...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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