How supply shocks affect supply and demand curves.

Consider the following event: Due to severe damage, a gas pipeline supplying gas to Arizona was shut down for a few weeks in the summer of 2003. Gas became scarce in Arizona, and prices rose, causing consumers to panic. Address the following questions in your analysis of this event’s affect on the market equilibrium: 1. Was there a shift in the supply curve, demand curve or both? 2. Did the shift happen to the left or to the right? 3. describe the direction of the shift in the supply curve, demand curve, or both.

Show the effect on the demand curve

For each of the following changes, show the effect on the demand curve, and state what will happen to the market equilibrium price and quantity in the short run: a. The price of substitute good rises. b. Consumer incomes fall, and the good is normal. c. Consumer incomes fall, and the good is inferior. If a product’s demand function is: Q=30-3p, then calculate the price elasticity of demand when: a. product price is $3 using the point elasticity formula. b. Product price decreases from $4 to $3, using the are elasticity formula.

The theory and estimation cost.

The theory and estimation cost. 3. Explain the relationship between firm’s short- run production function and its short-run cost function. Focus on the marginal product of an input and the marginal cost of production. 1. Base on your knowledge of the definition of the various measures of the short-run cost, complete this table. Q TC TFC TVC AC AFC AVC MC 0 120 X X X X 1 265 2 264 3 161 4 85 5 525 6 120 7 97 8 768 9 97 10 127 6. Indicate the effect that each of the following conditions will have on a firms’s variable cost curve and its average cost curve. a. The movement of brokerage firm’s administrative offices... click for more

Maximizing Profits

Explaination of attached spreadsheet in terms of benefits and cost to determine if keeping a portion of the business is necessary. See attachment.

You know from data collected on the Widget Market that market demand and market supply have both increased recently.

Suppose you are hired to manage a small manufacturing facility which produces Widgets. (a) You know from data collected on the Widget Market that market demand and market supply have both increased recently. As manager of the facility what decisions should you make regarding production levels and pricing for your Widget facility? (b) Now, suppose that following the supply and demand changes in (a), a substitute good goes up in price, and your costs of production increase. What new decisions will you make regarding production levels and pricing for your Widget facility? In this case, the manager would increase the supply and price; but is should increase both in a contro... click for more