Solve101WORK
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Consider the market for orange juice. In this market, the supply curve is given by QS =
100PJ ?20PO and the demand curve is given by QD = 1000?150PJ +100PC, where J
denotes orange juice, O denotes Orange, and C denotes coffee.
1) Assume that PO = 10 and Pc = 8. Calculate the equilibrium price and quantity
in the Orange juice market. (1 mark)
2) Suppose that a poor harvest season raises the price of oranges to Po = 15
a) Is it possible to reach a market equilibrium if the price of orange juice P J
remains unchanged? Why? How much quantity of orange juice will finally
be exchanged on the market? (2 marks)
b) Find the market price necessary to restore equilibrium. Deduce the
equilibrium quantity of orange juice. (2 marks)
3) Draw a graph to illustrate your answers. (1 mark)
Answer:-
Q2
Suppose the price elasticity of demand for the market of mobile phones is 0.90.
a. If all mobile-phone companies simultaneously increased their prices, will total
revenue in the industry increase or decrease? (1 mark)
b. If a single mobile-phone company increased its price, would you expect the
companyàtotal revenue to increase or decrease? Explain. (2 marks)
c. Suppose that the price in the market is initially $10 and the quantity demanded is
100 units. If the price in this market increases by 10%, what will be the
percentage change in the quantity demanded? (2 marks)
Answer:-
Q3
If you have SAR 50,000 to start a new business, you can earn 10 percent interest on
money in a bank account. Your business expenses are SAR 22,000 per year on rent, SAR
18,000 per year on supplies, and SAR 5,000 per year on part time help. As for your
personal expenses, your apartment costs you SAR 12,000 per year and your personal bills
are an extra SAR 6,000 per year. What is your opportunity cost of running the business?
(4 marks)
REQUERMENT
1- NO plagiarism
2- 2 REFERENCES
3- CLEAR GRAPH
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