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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

Identify which of the following would generate an increase in the market demand for tablet devices, which are normal goods.

a. A decrease in the incomes of consumers of tablet devices

b. An increase in the price of ultrathin computers, which are substitutes

c. An increase in the price of online apps,which are complements

d. An increase in the number of consumers in the market for tablet devices

In fig 3-7, what are the effects of a price increase from \(2 per portable power bank to \)4 per portable power bank on the quantities supplied by supplier 1 and by supplier 2 individually and combined?

Suppose that inalater market period,the quantities

supplied in the table in Problem 3-1 are unchanged.

The amount demanded,however,has increased by 30

million at each price.Construct the resulting demand

curve in the illustration you made for Problem 3-1.Is

this an increase or a decrease in demand? What are

the new equilibrium quantity and the new market

price?Give two examples of changes in ceteris paribus

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Consider the following diagram of a market for one-bedroom rental apartments in a college community.

a. At a rental rate of \(1,000 per month, is there an excess quantity supplied, or is there an excess quantity demanded? What is the amount of the excess quantity supplied or demanded?

b.If the present rental rate of one-bedroom apartments is\)1,000 per month, through what mechanism will the rental rate adjust to the equilibrium rental rate of\(800?

c.At a rental rate of\)600 per month, is there an excess quantity supplied, or is there an excess quantity demanded? What is the amount of the excess quantity supplied or demanded?

d.If the present rental rate of one-bedroom apartments is \(600 per month, through what mechanism will the rental rate adjust to the equilibrium rental rate of\)800?

In Fig 3-2, the current position of the demand curve is D1, and the price of a portable power bank is $3. If there is an increase in the price of tablet devices that are complements to portable power banks, will the demand curve shift to D2 or to D3? What is the change in the amount of portable power banks demanded?
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