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Chapter 3: Q. 3.18 (page 73)

In fig 3-7, what are the effects of a price decrease from \(5 per portable power bank to \)3 per portable power bank on the quantities supplied by supplier 1 and by supplier 2 individually and combined?

Short Answer

Expert verified

Reduces from 1: 55 to 35 and 2: 35 to 20

Combined: 90 to 55

Step by step solution

01

Step1. Introduction

Supply schedule or the supply function is the representation of individual as well as combined supply of portable power bank.

Law of supply establishes a direct relationship between prices and the quantity supplied.

02

Step2. Explanation

As price falls to $3 from $5, suppliers will supply lower quantity of goods. Supplier one shall supply 35 instead of 55 power banks and Supplier two shall supply 20 instead of 35 power banks.

The combined supply at $3 is 55 units instead of 90 units earlier at $5.

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Most popular questions from this chapter

In Fig 3-9, the current position of the supply curve is S1, and the price of a portable power bank is $3. If the suppliers anticipate a higher price of portable power banks in the future, will the supply curve shift to S2 or to S3? What is the change in the amount of portable power banks supplied?

In the market for portable power banks(a normal good), explain whether the following events would cause an increase or a decrease in demand or an increase or decrease in the quantity demanded. Also, explain what happens to the equilibrium quantity and the market-clearing price.

a. There is an increase in the price of carry cases for portable power banks.

b. There is a decrease in the price of devices used to charge portable power banks.

c. There is an increase in the number of consumers of portable power banks.

d. A booming economy increases the income of the typical buyer of portable power banks.

e. Consumers of portable power banks anticipate that the price of this good will decline in the future.

Assume that the cost of aluminum used by soft-drink companies increases. Which of the following correctly describes the resulting effects in the market for soft drinks distributed in aluminum cans? (More than one statement may be correct.)

a. The demand for soft drinks decreases.

b. The quantity of soft drinks demanded decreases.

c. The supply of soft drinks decreases.

d.The quantity of soft drinks supplied decreases.

Understand how the interaction of demand

and supply determines the equilibrium

price and quantity

What do you suppose has happened to the positions of the supply curves in the markets for commodities such as almonds,apples,cotton,oranges,grapes,lemons,rice,and walnuts?
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