Suppose that the current equilibrium price is $110 per software. A technological advance take place is...

Suppose that the current equilibrium price

is $110 per software. A technological advance take place is the software industry. Is this a

change in supply or demand? Describe what would be true in the market if, after this

development, the price remained at $110. Would this be an equilibrium price? Why or why not?

What would eventually happen in the market for software? What would happen to the

equilibrium price and quantity for software? Which quantity is affected and why? Illustrate

using a graph. What should happen in the market for software if retailers cut the price of

software (no graph needed here only and explanation)?

Expert Solution

Rahul Sunny answered 1 year ago

(1) Suppose that the current equilibrium price is $110 per software. A technological advance take place...

(1) Suppose that the current equilibrium price is $110 per software. A technological advance take place is the software industry. Is this a change in supply or demand? Describe what would be true in the market if, after this development, the price remained at $110. Would this be an equilibrium price? Why or why not? What would eventually happen in the market for software? What would happen to the equilibrium price and quantity for software? Which quantity is affected and...

1. Suppose that producers of a cotton benefit from technological advancements. The equilibrium PRICE of cotton...

1. Suppose that producers of a cotton benefit from technological advancements. The equilibrium PRICE of cotton will ----- and the equilibrium QUANTITY of cotton will -----. 2. Suppose sellers of manufactured ice expect prices to be higher in the future, and at the same time the price of a complement for this good increased, and demand shifts more than supply. As a result the equilibrium price ----- and the equilibrium quantity -----. 3. Casava and Plantains are substitutes. Suppose the...

Suppose that in a market the current price is P1, a price higher than the equilibrium...

Suppose that in a market the current price is P1, a price higher than the equilibrium price, Pe. Is this market in equilibrium or in a disequilibrium state? Please explain by answering the following questions. ( Word answers only ) 1. Is Qd=Qs, Qd>Qs or Qd<Qs at P1? Why? 2. Is there any excess (Xss) -- excess demand or excess supply in this market at P1? Why? 3. Will P1 stay the same or will there be a price adjustment?...

Question A Part 1 Suppose there is a technological advance that reduces the cost of producing...

Question A Part 1 Suppose there is a technological advance that reduces the cost of producing computer chips. Use supply and demand curves to analyse the effects in the following markets: a.market for computers.[5marks] b.market for computer software.[5marks] c.market for typewriters.[5marks] Part 2 Explain with the aid of an example, the law of demand and the law of supply[4 marks] b.Outline four factors which affect price elasticity of demand[4marks] c.The price elasticity of demand for coca cola has been calculated...

1.Suppose there is a technological advance that reduces the cost of producing computer chips. Use supply...

1.Suppose there is a technological advance that reduces the cost of producing computer chips. Use supply and demand curves to analyse the effects in the following markets: a. market for computers. b. market for computer software. c. market for typewriters 2.Explain with the aid of an example, the law of demand and the law of supply.

Suppose the market for frozen orange juice is in equilibrium at a price of $2.00 per...

Suppose the market for frozen orange juice is in equilibrium at a price of $2.00 per can and a quantity of 4200 cans per month. Now suppose that at a price of $3.00 per can, quantity demanded falls to 3000 cans per month and quantity supplied increases to 4500 cans per month. Draw the appropriate diagram for this market. Calculate the price elasticity of demand for frozen orange juice between the prices of $2.00 and $3.00. Is the demand elastic...

Pharmaceutical drugs have an inelastic demand, and computers have an elastic demand. Suppose that technological advance...

Pharmaceutical drugs have an inelastic demand, and computers have an elastic demand. Suppose that technological advance doubles the supply of both products (that is, the quantity supplied at each price is twice what it was). What is elasticity. Explain in the above context. What happens to the equilibrium price and quantity in each market? Which product experiences a larger change in price? Which product experiences a larger change in quantity? What happens to total consumer spending on each product?

Suppose the equilibrium price of gasoline is $3 per gallon. a. Using the demand and supply...

Suppose the equilibrium price of gasoline is $3 per gallon. a. Using the demand and supply graph, draw this equilibrium in the space below. Make this graph large, it will be used for future questions. b. Now suppose the government imposes a binding price floor on this market. Identify a value for this price floor that would be binding and show it on the graph. Graphically show whether excess demand or excess supply would result. c. With the price floors,...

What conditions are necessary for price discrimination to take place

There are activities that take place simultaneously throughout the software life cycle. List the activities and...

There are activities that take place simultaneously throughout the software life cycle. List the activities and briefly discuss each.

Question