Suppose that the jackfruit industry is initially operating in long-run equilibrium at a price level of $5 per pound of jackfruit and quantity of 150 millionpounds per year. Suppose that the Food and Drug Administration (FDA) reports that compounds naturally occurring in jackfruit help to prevent chronicillness.The FDA's research is expected to cause consumers to demandJackfruit at every price. In the short run, firms will respond byShift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the FDA's research.PRICE (Dolars per pound)10BSupplyDemandB71021+0030Demand90 120 150 180 210 240 270 300QUANTITY (Millions of pounds)In the long run, some firms will respond bySupplyuntil

Move the supply curve to the right as well to show the long-term consequences. The junction of the…

Answered: Suppose that the jackfruit industry is…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter6: Elasticities

Section: Chapter Questions

Problem 19P

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Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Jabari’s HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $105,000 to $90,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial four engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000
After moving into Schine, Dunkin’ reported that their (donut) market equilibrium occurs when 450 donuts are sold at a price of $1.50 per donut. They also reported that the producer will supply no donuts when the price is $0.50 and the customers will demand no donuts at $2.00, what are that supply and demand equations, assuming that both are linear
In a small town, there are two bakeries that produce similar types of bread. Bakery A has been in business for several decades and has a loyal customer base. Bakery B is a new entrant in the market, offering similar quality but at slightly lower prices. As a result, some customers have started shifting their purchases to Bakery B. Question:How does the concept of price elasticity of demand apply to the situation between Bakery A and Bakery B, and what factors might influence consumers' decisions to switch their bread purchases?
Suppose you are the manager of a restaurant that serves an average of 400 meals per day at an average price per meal of $20__. On the basis of a survey, you have determined that reducing the price of an average meal to $18__ would increase the quantity demanded to 450 per day. a. Suppose you have reduced the average price of a meal to $18 and are considering a further reduction to $16. Another survey shows that the quantity demanded of meals will increase from 450 to 500 per day. Compute the price elasticity of demand between these two points.
Why does a Starbucks coffeehouse face a downward–sloping demand curve while a dairy farmer has a horizontal demand curve? What other suppliers might face a downward–sloping demand curve?
Comment on the following statement: “In the short run, Mr. Mohammed, a seller in the Fruit& Vegetable Market in Al-Aweer, faces a demand curve that is simply a horizontalline at themarket equilibrium price. In other words, competitive sellers, in this market, face perfectlyelastic demand in the short run.”
Explain how demand is seen by a purely competitive seller.
Define Cultivate selected demand?
Which of the following will not cause the demand for product K to change?
Suppose the quantity of apples supplied in yourmarket is 2,400. If there are 60 apple producers,each with identical cost structures, how manyapples does each producer supply to the market?
Consider the supplier of a product that is an inferior good. For instance, an aluminum supplier for a canned goods producer. During a recession during which average incomes fall, which of the following best describes what would happen to the profit-maximizing price of the supplier? a. The supplier’s profit-maximizing price would decrease due to an increase in demand. b. The supplier’s profit-maximizing price would increase due to an increase in demand. c. The supplier’s profit-maximizing price would decrease due to a reduction in demand. d. The supplier’s profit-maximizing price would increase due to a reduction in demand.
According to Professor Kosmos, the demand for hot chocolate from the university café has the schedule QD = 2500 – 135p, where p is the price. The owner of the café says that their supply schedule is QS = 1600 + 315p. i) Identify the café’s daily profit maximising price and quantity. ii) When a new hot chocolate machine is installed, the Professor finds that the supply schedule has changed to QS = 1625 + 365p. What are the café’s new daily profit maximising price and quantity? iii) Find the price elasticity of demand for the café’s hot chocolate and comment on the result.

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