Question

In: Economics

Given below are the demand schedule and supply schedule for thelabour market for supervisors. Remember...

Given below are the demand schedule and supply schedule for the labour market for supervisors. Remember that demand for labour represents the employers’ demand for workers, while supply represents the workers’ willingness to work. Graph the demand and supply curve on one graph and determine equilibrium in this market. State the equilibrium. Label the graph properly.

a) State the wage and quantity that establishes equilibrium.

b) Calculate the coefficient of price elasticity of demand if the daily wage goes from $230 to $270. Is elasticity at this level inelastic or elastic

Daily Wage for Supervisors	Quantity Demanded (000s)	Quantity Supplied (000s)
$200	560,000	40,000
$225	475,000	65,000
$230	375,000	100,000
$270	300,000	125,000
$300	295,000	295,000
$325	200,000	350,000
$340	100,000	465,000
$365	61,000	575,000

Expert Solution

A. The equilibrium is at that point where quantity demanded is equal to quantity supplied. From the schedule we can see at a wage rate of $ 300 quantity demanded and supplied is equal to 295,000.

Equilibrium wage rate = $ 300

B. Price elasticity can be calculated using the following formula

Applying mid point method

P1 = $ 230, Q 1 = 375,000

P2 = $ 270, Q2 = 300,000

Plug in these values

Elasticity = - 1.39 (Elastic)

Rahul Sunny answered 2 years ago

Given below are the demand schedule and supply schedule for the labour market for supervisors. Remember...

Given below are the demand schedule and supply schedule for the labour market for supervisors. Remember that demand for labour represents the employers’ demand for workers, while supply represents the workers’ willingness to work. Graph the demand and supply curve on one graph and determine equilibrium in this market. STATE the equilibrium. Label the graph properly. ( a properly labeled and accurate graph, one for clearly identifying and stating equilibrium –both price and quantity) Please state the wage and quantity...

Table 1 below shows the schedule of demand and supply in the Market for Michigan wine....

Table 1 below shows the schedule of demand and supply in the Market for Michigan wine. Use this table to answer the following questions. Table 1 - Demand & Supply in the Market for Michigan Wine Market Price (P ) Quantity Demanded (Qd ) Quantity Supplied (Qs ) $0 150 0 $10 125 50 $20 100 100 $30 75 150 $40 50 200 $50 25 250 $60 0 300 Explain why a price of $40 cannot be an equilibrium price...

Below is a given demand schedule for cans of soda:

Below is a given demand schedule for cans of soda: price quantity 5 0 4 2 3 4 2 6 1 8 0 10 a. Draw the corresponding demand curve on a graph. b. Calculate the slope between all consecutive points on the demand schedule and add them as a new column in the table above. c. Calculate the arc (mid-point) elasticities between all consecutive points on the demand schedule and add them as a new column in the table...

Market supply and demand in a certain market are given by the following equations: Supply: Q...

Market supply and demand in a certain market are given by the following equations: Supply: Q = 4P – 60 Demand: Q = 300 – 5P (a) Compute consumer, producer, and total surplus in this market. (b) The government offers a $9 per-unit subsidy for firms in this market. Compute consumer surplus, producer surplus, government revenue and deadweight loss in this new setting. Are firms better or worse off with the subsidy? (c) Assume now that the government imposes a...

In a market demand and supply equations are: The demand curve is given as: P =...

In a market demand and supply equations are: The demand curve is given as: P = 50 - 3Q The supply curve is given as: P = 10 + 2Q Assuming a perfectly competitive market: What is the total wealth?

Market demand is given as Qd = 200 – P. Market supply is given as Qs...

Market demand is given as Qd = 200 – P. Market supply is given as Qs = 4P. a. Calculate equilibrium price and quantity a. If an excise tax of $4 per unit is imposed on sellers, calculate the price consumers pay Pc and the price sellers receive Ps. c. Also, calculate the dead weight loss and consumer surplus after the tax.

Market demand is given as QD = 50 – 2P. Market supply is given as QS...

Market demand is given as QD = 50 – 2P. Market supply is given as QS = 3P + 10. Each identical firm has MC = 2.5Q and ATC = 2Q. a. What quantity of output will a single firm produce? What is the price? b. Calculate each firm’s profit? What will happen to it in the long-run? Explain the process. c. Draw the individual demand, MR, supply and ATC curves. Show profit in the diagram

Market demand is given as QD = 300 – 6P. Market supply is given as QS...

Market demand is given as QD = 300 – 6P. Market supply is given as QS = 4P. Each identical firm has MC = 6Q and ATC = 3Q. What is a firm’s profit? Show your work

market demand is given as QD = 40 – P. Market supply is given as QS...

market demand is given as QD = 40 – P. Market supply is given as QS = 3P. Each identical firm has MC = 5Q and ATC = 3Q. What is the number of firms in the market?

Market demand is given as Qd = 200 – 3P. Market supply is given as Qs...

Market demand is given as Qd = 200 – 3P. Market supply is given as Qs = 2P + 100. In a perfectly competitive equilibrium, what will be price and quantity? Price will be $20 and quantity will be 140. Price will be $50 and quantity will be 260. Price will be $100 and quantity will be 300. Price will be $140 and quantity will be 380.